The use of credit cards in India has steeped with 57.4 million cards in circulation at present. The convenience that this payment tool provides, along with other attractive benefits, has led to it becoming one of the preferred modes of payment.
Even though there are a host of benefits to be availed, such as reward points, cashbacks, discounts, etc., it is important to apply caution with respect to the timely payment of credit card bills. Nevertheless, credit cards are handy financial tools and come with a range of features for user convenience, one of them being credit card to bank transfer. Regardless, prudence is always required when availing the facility. Before that, take a look at what it comprises to better understand the considerations you should make when availing the facility.
What does fund transfer from credit card to bank account comprise?
Transferring funds from credit card to bank account is a typical feature that can come in handy when in need of finances during an emergency. When availing the facility, a cardholder can select a suitable amount from the unutilized credit limit to complete such transfer.
Credit card to bank transfer is, however not possible directly and can be done via a payment wallet. Since these transfers involve hefty charges, users must plan regarding how to repay credit card debt efficiently before availing the facility.
Now, take a look at some of the essential considerations you must make before availing a funds transfer facility from your credit card.
Things to consider before initiating credit card to bank transfer
- Charges involved
As a credit card to bank transfer involves doing so via a payment wallet, the transferee also has to incur a high transaction fee paid to the wallet for the transfer. The amount so charged can go up to as high as 3% of the amount transacted. Such a high amount can pile up to form sizable financial implications on the cardholder, thus outdoing the benefits of this transfer.
- Rate of interest
Since this transfer facility is out of the ordinary and does not form the purview of facilities a credit card is designed for, the card issuer also charges a high rate of interest on the transferred amount.
Such an interest rate can easily surpass the existing rate levied on credit card dues, thus creating an unnecessary financial burden on the card user. Thus, make sure to consider the interest applicability before applying for fund transfer from your credit card to bank account.
- Time taken for transfer
When in need of finances urgently, you must also take care to consider the time involved in the account transfer. Ideally, when affecting a credit card to bank transfer, it can take anywhere between 1 to 5 days to reflect such transfer in your account. It thus blocks your finances, which may not be feasible when in urgent need of finances.
While these transfers are available on most credit cards, some of them also come with alternative financing options that can suitably fulfil your funding needs during an emergency, while being affordable.
Alternatives to account transfer from credit card
Using your credit card wisely always involves smart decision-making related to your finances. One such way is to look for better alternatives to a credit card to bank transfer for effective financing for maximized benefits. Some of them include –
- Opt for a credit card loan
Credit cards often come with emergency loan facilities against the unutilized credit limit that card users can conveniently avail without delay. Some financial institutions provide such credit card loan with an interest-free period extending up to 90 days and repayable in easy EMIs.
- Look for interest-free ATM withdrawal
Select cards like the SuperCard also come with suitable financing options during an emergency in the form of interest-free cash withdrawal from ATM. Such period of nil interest charge can extend up to 50 days, allowing users to manage their funds easily.
The concerned card issuer also brings pre-approved offers to make financing hassle-free and time-saving for customers. One can avail such offers on a range of financial products, including credit cards, personal loans, and business loans. You need to provide only your essential contact details to check your pre-approved offer.
When seeking finances from your credit card during an emergency, you must thus make sure to select the best option available. The alternatives mentioned herein are not only swift to avail but are also cost-effective for cardholders.