Credit cards have played a vital role in our lives. When used responsibly, they can help us earn rewards, manage accidents, tours or unexpected expenses, and build credit, all of which are considered valuable tools. That’s why it’s no secret that many of us would like to have one.
Since they have no direct connection to our real money, we sometimes tend to turn to them for spending. That’s why it has become a big part of our life. So naturally we also want to add it to our bank account. That said, if you’ve been looking for ways to transfer money from a credit card to a bank account, well, you’ve found the right article.
Here, we’ll walk you through how to transfer money to a bank account, teach you important words, the pros and cons of having a credit card, and the difference between credit and debit cards.
Important terms to know when transferring money from a credit card to a bank account
1. Bank account
A bank account is a contract with a bank that allows you to keep part of your savings in the bank and withdraw it when needed. There are two types of accounts in this framework: your current account and your savings account. A checking account differs from other types of financial accounts in that it generally allows free withdrawals and deposits, while savings accounts may have restrictions on both.
The financial payment for the opportunity to borrow money is known as interest, and it is usually stated as an annual percentage rate, also known as APR. It is the amount of money a lender or finance company earns for giving money to someone who has borrowed. Interest can also mean an investor’s share of ownership in a company, which is usually calculated as a percentage.
3. Credit card
A credit card is an electronic card provided by financial institutions that allows members to lend money to pay for goods and services to merchants who accept credit cards. Credit cards require those who hold them to repay the money they borrowed, plus any related interest, and agreed additional fees, either in full or over time through the payment due.
4. Debit card
When a debit card is used, the amount is withdrawn immediately from the user’s current account. Sometimes called “bank cards” or “payment cards”, they can be used to purchase services or products, as well as to obtain cash from an ATM or retailer that will allow you to purchase an additional amount.
The difference between credit cards and debit cards
- Money that belongs to the bank that you can borrow
- Borrowed money must be returned in due time with interest
- Allow you to use a bank’s line of credit
- Better protection against fraud
- Can offer multiple rewards and benefits such as discounts and reward points
- The money you own
- The money withdrawn does not have to be returned
- Deduct money directly from your account
- Has less fraud protection
- Most banks don’t offer rewards
Benefits of owning a credit card
1. Protection against fraud
In most cases, credit cards offer much more security than debit cards. The customer’s greatest liability for items purchased after the credit card goes missing is $50 if the card is reported missing or stolen promptly.
2. Provides Multiple Rewards
When you use a credit card, you may be rewarded with points that can be used for travel rewards or retail discounts. This form of plastic can also be used almost anywhere, including internationally.
3. Provides financial backup in case of emergency
Credit cards can also be used as a financial safety net in the event of job loss, car maintenance, or illness resulting in hospitalization. Some people use them to cover bills and pay off remaining debt each month.
This can help you earn more bonus rewards points, as well as improve your credit score when used carefully. A higher credit score could help you qualify for lower interest charges on debt, such as homeowner loans, other types of loans, as well as new credit cards.
Disadvantages of owning a credit card
1. Overspending with the card can lead to debt
When you use a credit card, you are spending the bank’s money, not yours. This money must be repaid, plus interest. You must at least meet the required amount due monthly. If you let the outstanding balance grow, a higher interest rate can put you in more debt.
2. Paying late impacts your account’s credit rating
Your credit rating can be improved by making timely payments and keeping credit card balances low. However, if you pay late, max out one or more of your cards, close outdated accounts, or apply for new lines of credit too frequently, you risk damaging your credit history.
How to transfer money from a credit card to a bank account
There are two ways to successfully transfer money from a credit card to a bank account. The first way would be an online money transfer, while the second would be an offline money transfer. Today, we’ll walk you through how to transfer using both offline and online, so you can have more choices when it comes to moving.
Offline money transfer
Offline money transfer does not require an internet connection. Thus, transferring them offline has more means than online, which requires apps and the like. Although the offline money transfer procedure is relatively longer than offline, they would still have the exact fees.
First option: cash advance at the ATM
This is a service that allows you to use your credit card to withdraw money from an ATM and transfer the money to your bank account. The fees also depend on the chosen bank and its rules.
Step 1: Withdraw money from an ATM with your credit card.
Step 2: Take the money to your bank location and deposit it.
Second option: phone call
A phone call is perfect for those who need money right away and don’t have internet access.
Step 1: Contact your card provider first.
Step 2: Request a transfer of funds.
Step 3: Check the amount you wish to deposit into your bank account before approving.
Step 4: Provide the appropriate information needed, such as bank account numbers.
Step 5: Complete the transaction by following their instructions.
Third option: Checks
If you don’t want to call the bank, you can also choose to send yourself a check. Keep in mind that this requires you to go to a particular establishment that does. There may also be possible charges depending on the bank, amount, etc.
Step 1: Type “self” as the beneficiary’s name.
Step 2: As you would when writing a check, insert any other pertinent information.
Step 3: Go to your bank branch and deposit the check.
Money transfer online
Unlike offline money transfer, online money transfer would require the use of mobile apps as well as an internet connection. That said, to go through the online transfer process, you will need to download apps for it. Online money transfer is usually used when banks allow you to transfer money. But an offline transfer does not necessarily mean that the bank does not allow it.
First option: electronic wallets
There are various online wallets that allow you to make transfers directly connected to your bank account in complete safety. The steps to follow also depend on the electronic wallet of your choice.
Option Two: Internet Banking
Internet banking gives you direct access to your credit card bank account information online and can be used to transfer funds. The fees for transferring money from a credit card to a bank account vary depending on the bank you have chosen.
Step 1: Go to your bank’s website.
Step 2: Next you need to login to your credit card account.
Step 3: Choose a transfer method.
Step 4: Place the amount you wish to transfer.
Step 5: Fill in the essential information on the form.
Step 6: Complete the transaction by following the instructions given to you.
The frequent use of credit cards can sometimes be tempting. This is because the money we spend is not exactly ours, so it is easy to get lost and use it all up. However, it is still important to make sure we practice balancing the money we have to ensure we maintain a good credit rating. Also, being more careful can reduce the chances of encountering problems such as fraud, debt, etc.
In the end, it would always be up to you whether or not you should spend the money you have on both your credit card and your debit card. You just need to make sure that you are making wise decisions that will not negatively affect your future.