Credit cards have always been a good alternative for cash, as portability and the benefit of avoiding upfront payment make it more user-friendly. Credits cards have been used for the purchase of any goods irrespective of the worth of the product. There are times when you want the card amount to be transferred to your normal bank account in case of any necessity of big purchases or for security concerns. Either way, this method has been followed and easier to be processed with few prerequisites and steps to be heeded.
There are many ways to do this transfer at ease. The three major methods people generally resort to are:
- ATM withdrawal;
- PAYTM transfer;
- Use Digital Wallets.
Before we unfold the methods to transfer the money free of charge, we need to learn what a credit card is and what a merchant account entails?
Credit card processing:
Most of the heavy work that involves credit card transfers is done by providers who perform the task for you at ease. The basics of credit card processing is an awareness that everybody, in general, should possess even before delegating it to a provider who can do it for you.
Usually, the customer who has a credit card buys the goods and lends the card to the storekeeper. The card is swiped and the transaction is passed on to the validation of the issuing bank which sanctions or declines it in go.
When it is approved, an approval code is generated which is passed on to the sale device of the store. The bank will revert with the money for the concerned product which was purchased immediately.
The bill for the money spent will be sent to the card owner from the bank. The fee amount which corresponds to the credit card transaction is called interchange level. This level varies according to the purchase made by the cardholder. Another important factor that impacts the category of interchange level is the type of card which the owner has.
There are so many categories that define the eligibility of a particular card. Even the pricing model and structure will depend on that and let us look into the prospective price structure that most providers offer.
There are 2 pricing structures and models which seem to be more predominant when it comes to provider’s choice. One is the tiered pricing and the second one is the interchange costs. They work dynamically with each other, and let us have a sneak into their relationship further.
Any transaction comes with a charge, and they are divided into two categories. One is interchange cost which is an impact of the dues and assessments. The second one is the processor cost which is paid to the card networks directly.
The interchange cost values are universal and do not change for any organization, be it a less-profile or a high-profile one. All the dues and assessments do not have any redemption and they are common for everyone at stake.
The processor cost varies according to the type of card you possess. This can be negotiated according to your revenue or earning capacity while choosing the best merchant provider.
Tiering price, on the other hand, is the classifier for these interchange costs. It takes the average price and sorts it according to the tiers.
How to add money from credit card to bank account:
There are certain prerequisites you have to remember before transferring money from a credit card to a bank. Those points should be kept in mind before you start transferring.
- The transaction fee can be higher;
- It will take time to get transferred to your bank account, and it will show up later than 1 to 5 days max.
- There would be an interest rate that might shoot up higher than the credit rate.
There are also other options to consider, which could be an easier choice. Some credit cards have an ATM card withdrawal facility which can be availed. Some bank cards do not demand any interest as long as your payment is done within the required time slot. Those cards can be used for transfer.
Methods to transfer:
There are familiar ways to do the transfer and the famous ones involve sending the money directly to the bank with the help of Western Union, Paytm and other e-wallet services. The below steps will help you transfer the account with the help of Paytm.
- Register an account in the Paytm;
- Create a Wallet;
- Transfer the money from credit card to the Wallet;
- Navigate to the passbook of the Paytm account;
- Select the option for transfer of money;
- Fill in all the information like account number and IFSC code;
- Then press the send button.
The money would have gotten transferred.
Checks for transferring money:
Transferring amounts from a credit card to your bank account is not the sole purpose of credit cards. This could create problems with your income tax filings as any checks or validations involved in bypassing your payment from the credit card could alert signals to the authorities. There would be a verification call and lots of checks from the income tax department and your bank for a smooth transaction.
There are quite a few restrictions and charges involved in transferring money from a credit card to a bank account. However, if there is a necessity for a big purchase, then opting for a transfer is a better idea as an alternative for spending huge money on credit card interest rates. The applications and technology advancement have eased this process to a large extent that transferring is no longer a herculean task. Just tread carefully with the protocols of the methods, and you would be through with money transfer instantly.