How to Transfer Money from a Credit Card to a Bank Account?

If you ever find yourself in a situation where you only have funds on your credit card and need to transfer them to your bank account, you can use a credit card feature called a cash advance. 

You can transfer money from a credit card to a bank account via various methods, but all methods incur processing fees (1.5% to 3.5%) and bank surcharges. Traditional ATM cash advances trigger upfront cash advance fees (2.5% to 3.5%) and daily compounding interest with zero grace period.

What are the Methods to Transfer Money from a Credit Card to a Bank Account?

In this article, we will discuss ways to transfer money from your credit card to your bank account in a few simple steps. 

Your bank may not allow you to transfer funds from your credit card directly to your bank account. However, you can use alternative methods to transfer the funds to your bank account. Let’s look at each of the methods in detail.

How to Transfer Money from a Credit Card When Banks Permit It

We have listed the methods in increasing order depending on the effort required. The methods that take the least effort and time are the ones that are done using a smartphone.

• Mobile Banking or Net Banking

You can directly transfer funds from your credit card to your bank account through net banking or mobile apps if your bank allows it. Here are the steps that you need to follow -

• STEP 1: Visit your bank’s website or your bank’s official banking app. Log in to your account using your credentials.
• STEP 2: Go to the ‘Transfers’ or ‘Payments’ section.
• STEP 3: Choose the credit card from which you want to transfer funds.
• STEP 4: Select the bank account to which you want the transfer to be made.
• STEP 5: Enter the amount and verify the transaction via the OTP received in your registered mobile number.

Please note that the daily transfer limit for each bank can vary. 

• Phone Call

You can call your credit card issuer on their customer care line to quickly transfer funds from your credit card to your bank account. Follow the simple steps provided below -

• Step 1: Make a phone call to your credit card company and request a fund transfer.
• Step 3: Confirm the amount to be transferred to the bank account.
• Step 4: Provide all the required details, such as the bank account number and more.
• Step 5: Finally, follow the prompts to complete the transaction.

• e-wallets

You can also transfer money indirectly to your bank account via e-wallets like MobiKwik. The exact steps will slightly vary depending on the app you choose. Here are the steps you need to follow on the MobiKwik app as a guide -

• STEP 1: Log in to your MobiKwik account using your credentials. 
• STEP 2: Go to ‘Wallet’ → ‘Add Money’.
• STEP 3: Enter the amount you want to transfer.
• STEP 4: Choose ‘Credit Card’ under the mode of payment.
• STEP 5: Enter the required credit card details.
• STEP 6: Authenticate the payment by verifying the OTP sent to your registered mobile number.
• STEP 7: The money will be reflected in your wallet shortly. 
• STEP 8: Now, to transfer it to your bank account, go to ‘Wallet’ → ‘Transfer to Bank’. 
• STEP 9: Input the amount, check your bank account details, and complete the payment. 

These digital wallets allow you to make transactions quickly and securely. They require a KYC to be completed and are linked to your bank account.

How to Transfer Money from a Credit Card to a Bank Account When Banks Don't Allow It?

Some banks don’t allow the transfer of funds from credit cards. If all else fails, you can use these methods -

• ATM Cash Advance

This is the easiest method to transfer money from your credit card to your bank account if you cannot deposit it directly. Here are the steps involved -

• STEP 1: Use your credit card for a cash advance from any ATM that supports your card.

• STEP 2: Deposit the money into your bank account by visiting your nearest bank branch. 

• Cheque

For this to work, your credit card account should have a checking account. If you have it, follow the steps given below -

• STEP 1: Write a cheque to yourself by writing ‘Self’ in the payee section. 

• STEP 2: Provide all other details like the amount, bank account, and credit card details.

• STEP 3: The amount will be deducted from your credit card balance and deposited in your bank account.

Note: There may be charges based on your bank's check collection and deposit policies.

What are the Charges for Transferring Money from a Credit Card to a Bank Account?

The exact fees and charges for transferring money from a credit card to a bank account will depend on your bank as well as your credit card variant. The average charges are mentioned below to give you an idea. However, make sure to check with your bank before starting a transaction.

• Convenience & Processing Fees

Depending on the platform or portal you use, you will be charged an upfront processing fee ranging between 1.5% and 3.5% of the transferred amount.

• Restricted Merchant Category Surcharges

Some payments will have an extra surcharge. For example, an extra 1% surcharge + GST might be charged on rent payments, education fee transfers, and wallet top-ups.

• 18% Goods and Services Tax (GST)

You will have to pay GST on all convenience fees, cash advance charges, processing fees, and interest payouts.

• Daily Finance Charges

If you withdraw money from your credit card through an ATM, it is classified as a cash advance. In that case, banks charge 3.0% to 3.75% per month (36% to 45% p.a.), calculated daily from the transaction date until the balance is fully cleared.

Can I Transfer Money from a Credit Card to a Debit Card?

Your debit card is connected to your bank account. A debit card can be used to withdraw money from your bank account and also make cashless payments online and offline. However, you cannot directly transfer money to your debit card from your credit card. 

Once you transfer money from your credit card to your bank account, you can access it using your debit card.

What are the Hidden Risks and Income Tax Implications of Credit Card Bank Transfers?

Transferring money from a credit card to a bank account will incur operational and tax risks, such as -

• Income Tax Scrutiny (SFT Section 68)

High-value credit card transactions (exceeding ₹2 Lakh in a year) are reported to the Income Tax Department under the Statement of Financial Transactions (SFT). Transferring credit funds into bank accounts or relative accounts can trigger tax notices if flagged as unverified cash flow.

• Credit Utilization Ratio (CUR) Spike

If you utilize a large portion of your credit limit for bank transfers, your CUR may rise. A CUR higher than 30% of your credit limit shows you as credit hungry and may affect your credit score.

• Revocation of Interest-Free Grace Period

Many card issuers eliminate the interest-free grace period for the entire billing cycle if cash-equivalent transfers are detected, applying interest to all subsequent retail swipes.

• Card Suspension Risks

Repeatedly transferring money between your credit card and self-linked bank accounts violates credit card fair-use agreements, which can lead to temporary card blocks.

Regularly monitor your credit profile health by taking a moment to Check Your Credit Score for Free.