Why do some people transfer money from credit card to bank account? Certain types of cash transactions are not accepted by credit card.
Is it right or wrong to transfer money to a bank by credit card?
For example, home loan installment, car loan installment etc. For reasons like this and for monthly cash crunch, people want to transfer money from their credit card to bank account.
There are various ways to transfer money from a credit card to a bank account.
But with each method, you will have to lose more money in fees. Let’s see what it would cost if you withdraw Rs 50,000 this way.
Cash withdrawal from credit card through ATM and investment in bank account; In this method, for example, if the fee is 3%, the fee is 50,000 * 3/100 = 1500. Moreover, you have to pay interest from the date of withdrawal.
For example, if your credit card’s annual interest rate is 25%, the daily interest rate is calculated as 25/365 = 0.068%. There is no month-to-month grace period for such withdrawals, which is usually provided for a credit card.
Even after 6 months, the loan amount has changed to 56,000 rupees. Compound interest works negatively.
Transfer from credit card to eWallet account
and then transfer from there to bank, In this mode too, you have to pay a fee to transfer money to this wallet. For example, in Paytm it charges 2%, 50,000 * 2/100 = 1000 rupees. This will be added to your wallet account as gift card. In addition to this, 5% of Paytm will be charged for eWallet to Bank transfer. 50000 * 5/100 = 2500 rupees fee. So, at most, it costs 2500 rupees.
Money Transfer Transfer money directly to a bank account through a credit card; Such credit cards are designed to transfer money to bank accounts. Once the money is in the bank account, the loan must be paid off on a monthly basis just like any other credit card. It is popular abroad. Such credit cards are yet to arrive in India.
A very important one; With debt, paying off debt is not a healthy thing. As it jumps from one hole to another. It is nothing but a pit, and there is no way to come up. With more debt, the hole gets deeper. Instead, try to live frugally, save more money, pay off debt, and get out of debt.
(Important this save money)
Through money transfer websites; Credit card funds can be sent to banks through money transfer websites such as Western Union. This is subject to charges. It costs more money according to the fee.
Through credit card payment websites such as Paytech; You can pay monthly expenses through credit card through websites like Paytech, Plastic. Also, payment can be made to another bank account. But, you can’t pay to your account. The fee will be charged according to how soon the money needs to go to the bank. For example, at 2.5%, the fee would be 50000 * 2.5 /100 = 1250 rupees.
For me, transferring money to the bank via credit card is a waste of money. Like two sides of the coin, they end up in more debt not only through debt but also through payments. If you withdraw money from a credit card, the compound interest starts working against you from the very next second. Therefore, it is not a good idea to transfer money to the bank with a credit card. If you want to settle like that, try to calculate which one has the lowest fee and change it.
Let’s use a debit card instead of a credit card. Avoid debt in any form. A man without debt is a man at peace.
