What do you do when you need money in a bind? If you are fairly savvy with online banking you could transfer money between your accounts. But, how could you do that with your credit cards? Depending on your bank, you may have a limit on how much money you can transfer or how many times you can transfer during a statement period. For example, institutions like TD Bank and Bank of America, only allow six transfers between your accounts.
So, to circumvent these hurdles, you could opt to transfer your money a different way. How do you transfer money from your credit card to your bank account? Some people chose to use third party applications like Square to transfer the money.
This method requires to sign up for Square; signing up is free for the most part, but we will get to that later. After you sign up, you can use your credit card to pay yourself through your pseudo-business. Within the next business day, you should have your money in your bank account.
There are a few things to consider before using the method to transfer your money. While it is an easy way to transfer money from your credit card to your bank account, your transactions are still being monitored. In fact, Square frowns upon users doing this since it violates the terms of service. If you are found using Square to merely transfer money through your account you run the risk of having your account suspended.
Doing this could also cause complications with your credit card company, as well. You want to make sure you read through the terms of service from your bank to make sure you are not violating any rules they have. You also have to make sure you calculate the right amount of money you need to transfer since Square has a 2.75% transaction fee. This is a relatively small amount, but you want to make sure you have the right amount so you do not have to use this method multiple times.
If you prefer an easier route you can try PayPal
Yes, that is right, you can use PayPal to transfer money from your credit card to your bank account. It works fairly the same way Square does, however, you do not need the card reader to make the transfer. To do this type of transaction you need to first make an account with PayPal; be sure to link your bank account to this site to make it easier to transfer the funds quickly. After you can another “ghost” account that you can connect your credit card. From that point, you should be able to send money with the email used to create the first account.
Most of the time this will look like a gift in your PayPal account so you should not have to pay the extra percentage. Just like before you do not want to make a habit of this. It is an easy way to transfer money from your credit card to your bank account, but you could lose access to your PayPal account, as well.
Sometimes you have to do things the old-fashioned way
If you are one of those people that hate electronic transactions you can go the traveler’s cheque route (yes, we are talking to you, grandma). You simply need to use the credit card to purchase the checks then go to your bank to cash them or just deposit the checks into your account. Hopefully, these tips help to with your next transaction.
Join our newsletter
If you like Critical Financial, subscribe and get our latest content via email.