Can i transfer money from my credit card to my bank account

There are four main ways to transfer money from your credit card to your bank account.

The first is by visiting a teller at your bank. You can ask the teller to withdraw funds from your credit card and deposit them into your bank account.

The second option is to do the same process yourself at an ATM. You’ll put your credit card into the machine and withdraw cash. Then you can start another transaction and deposit the funds into your bank account.

If your credit card and bank account are with the same institution, you can likely do an online money transfer. This is the most convenient method since you can do it anywhere using online banking or your bank’s app.

Finally, you can use a credit card convenience cheque. Typically, you’ll need to ask your financial institution for these cheques. Credit card convenience cheques work the same as a regular cheque: you write a cheque, deposit it into your bank account, and then have the funds available.

Here’s the catch: All of these methods are considered to be cash advances, which come with important drawbacks.

How does a cash advance work?

A cash advance is when you use your credit card to borrow cash. It’s an incredibly expensive method of borrowing money, thanks to high interest rates that start being charged as soon as you withdraw the money — there’s no grace period like there is for purchases.

Sometimes the cash advance rate on your credit card is the same as the purchase APR, but it may be higher.

On top of the high interest rates, you may also be charged a cash advance fee for using the service. This could be a flat fee, a percentage of the amount you withdrew, or a combination of the two.

Will transferring money from my credit card to my bank account hurt my credit score?

No, not if you are careful. Using your credit card to get cash won’t have an impact on your credit score.

However, by using your credit card to get a cash advance, you are increasing your credit utilization ratio. A high credit utilization ratio can have a negative impact on your credit score, so you should consider your utilization before making the choice to get a cash advance.

If you do need to take out a cash advance, you should start paying it off as soon as possible to help avoid any fees. Late payments on this balance can also hurt your credit rating.

Pros and cons

As mentioned above, using your credit card for a cash advance is generally not recommended by financial experts. However, there are a couple of instances where this option can come in handy. Keep in mind that you may be able to pay bills with a credit card instead of accessing a cash advance, so look into all your options before making this decision.

Pros

• Fast and easy access to cash
• Good option for an emergency

Cons

• High interest rates
• Additional fees
• Can impact your credit score
• Can easily lead to credit card debt

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Alternative ways to get cash into your bank account

Cash advances from your credit card can be handy in an emergency, but they are not the best route to take. If you need cash, you’re likely better off considering a personal loan or a line of credit. Both of these options have better rates and often offer more available funds, so they’re more financially-friendly solutions.

If you’ve got a credit card, you might be wondering whether you could transfer some of the available money from your card into your bank account. Perhaps you’ve got a small overdraft you’d like to clear or maybe you just want some cash in your current account. 

Whatever the reason, you’ll be glad to hear that you can usually do this, and there are a couple of approaches you can take. But it does depend on what credit card you have.

How to transfer funds from a credit card to a bank account with a money transfer card 

If you’ve got a special money transfer credit card, you’re in luck. This is the simplest way to transfer funds from a credit card to a bank account, as it’s been designed for this purpose. That means the charges and interest for transferring money are usually lower.

The other thing you could do is take cash out from an ATM using your credit card. You could then deposit the cash into your bank account. 

However, it’s important to be aware that taking cash out on a credit card can be very expensive. You’ll usually start paying interest from the moment you take the cash, and you may even pay fees too. This tends to be the case even if you’re still in your 0% interest period, so it’s best to avoid it if you can.

However you do it, once you’ve transferred cash from your credit card to your bank account, you’ll be able to use your bank debit card to pay for things. But this way of borrowing money is most commonly used for paying off an overdraft or debt.

What is a money transfer credit card?

A money transfer credit card is a special type of credit card that you can use to pay cash directly into your current account.

Some money transfer credit cards charge interest, but others come with a 0% interest deal for a set length of time. Be aware, though, that your card provider might still charge a fee for each transfer.

As with all credit cards, once you have more than £0 on your balance, you’ll need to pay off a minimum amount each month. 

Or you might choose to clear the balance each month. If you don’t make at least the minimum repayment, it'll be marked as a missed payment, and you'll likely be charged a late payment fee.

How much money can you transfer?

This depends on your personal agreement with the bank. When they look at how much you can transfer, it will base its decision on your financial situation and credit record.

You’ll be given an overall credit limit and, separately, you’ll also be given an amount you can transfer to your bank account. The amount you can transfer is usually a percentage of the overall credit limit. Here're more about why your credit limit matters

The fee for doing a transfer is usually a percentage of the amount you’re transferring.

For example, if you’re transferring £1,000 and the fee was 3%, you’d pay £30 for the transfer. So your balance would then be £1,030 (if you had nothing else outstanding on the card). It tends to be somewhere between 2% and 4%.

How to choose a money transfer credit card

It’s important to find a good deal when you’re choosing a money transfer credit card. 

They usually give you a set amount of time within which you can repay the money you’ve transferred without paying any interest. But there will be a transfer fee.

The longer the interest-free period, the higher the transfer fee is likely to be. The longest 0% period you can usually find is about 18 months.

It’s in your interests to choose a 0% interest money transfer card. You’ll need to work out how long you’d want to clear the debt incurred when you transfer the money. If you choose a card with a short 0% interest period, you’ll need to pay more each month to get it paid off before the 0% period expires. 

You should try to choose the card with the lowest fee with a 0% period that lasts as long as you’ll need to pay back the amount you’re borrowing. If you’re not sure, it’s best to go for a longer 0% period.

Things to think about before transferring funds from a credit card

Transferring funds from a credit card to your bank account is something to think carefully about. Is it the best option for you? Do you have other options? Will you be able to pay it back? Are you getting the best deal? There’s a lot to consider.

Here are some important things to think about before you take the plunge.

• Fees: Check the fees carefully to see how much you’ll pay to do a transfer. As it’s usually a percentage of the transfer, it will be higher the more you transfer. Read more about how credit card charges work here.

• Interest rates: Check the interest rates. If you’re choosing a 0% interest money-transfer deal, look at how long the 0% period is. Also check what the rates will be after that period as they’re likely to rise a lot.

• Temptation to spend: Will you be more tempted to spend money unnecessarily once it’s transferred into your current account?

• Other options: Calculate if it’s cheaper to transfer funds from your credit card, or to choose another route. For example, another option could be to use your overdraft. Or you could get a loan, if it works out cheaper over time. It’s always best to do your research.

• First transfer timeline: Some money transfer credit cards require you to do a transfer within 60 days. If you don’t, you could lose out on your 0% period.

Are there any alternatives to money transfer cards?

You can take cash out from a credit card but, as mentioned above, this can be a very expensive route.

Alternatively, you could get a loan, or you could use your overdraft. But you might find that transferring money from a credit card to your bank account is a cheaper option than taking out a loan. It is also likely to be cheaper than using your overdraft. It all depends on interest rates and your personal financial situation. 

The good thing about transferring money from a credit card to your bank account is that you won’t have to secure your borrowing against your home when transferring cash from a credit card, which you might do with a loan. So it can be less risky.

How to find a money transfer card

You should be able to find the right money transfer credit card using our comparison table.

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