How to Transfer Money from Credit Card to Bank Account

Tom
Tom August 2022 Content Creator 9 min

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In today’s digital, online banking world, cash may no longer be king. But that doesn’t mean we don’t need it from time to time: paying friends for dinner, internet shortages, rural areas—all these scenarios may call for cash reserves. To make matters worse, we might need to transfer some funds into our bank account for that cash.

Did you know you can use your credit card for this?

In this post on how to transfer money from credit card to bank account we’re going to go over all the ways you can do this, online and offline. We’ll also discuss some of the reasons you should avoid doing this with your credit card, before providing definitions of some of the major terms used in this article. 

How to transfer money from credit card to bank account transfer in a nutshell

  • It is possible to transfer money from your credit card to your bank account
  • Doing it online means using internet banking and logging into your credit card provider’s website
  • E-wallets also offer another way to make the transferral
  • Offline methods include ATM cash advances, cheques, or phoning the credit card company directly
  • When you are deciding to transfer money from credit card to bank account, make sure you’ve exhausted all other options, learned about the fees, and attempted to borrow money from friends as an alternative
  • Transferring from credit card to bank account will incur high fees and interest rates, and is generally to be avoided if the situation isn’t an emergency

Can I transfer money from a credit card?

Yes. There are two distinct ways you can transfer money from a credit card, both online and offline. Which type you use will depend on your preference and circumstances at the time.

How to transfer money from credit card to bank account

Let’s go through each money transferral method and the different options within those methods. 

Online transfer

Online transfers are convenient, fast, and secure. However, they come with a few requirements: you’ll need to be somewhere you have access to the internet, data on your mobile phone or WiFi, and a mobile banking app. 

Internet and online banking

Internet banking is a great way to get a rundown of your current financial situation, while also giving you the option to transfer funds and movie money around.

What you’ll need to transfer money from your credit card is a bank account with your credit card registered to that account. Then it’s just a series of simple steps: 

  • First, go to your financial provider’s website and log in to your credit card account
  • Second, choose your preferred transfer method
  • Third, decide on the amount you wish to transfer 
  • Fourth, fill out the correct information and follow any directions given to you

And that’s it!

E-wallets

E-wallets are prepaid accounts linked to the holder’s bank account. They function similarly to debit cards, are password-protected, and can be used to pay for things like groceries, or online transactions like booking flights. 

Transferring funds from your credit card to your bank account via your E-wallet is similar to transferring via online banking:

  • First, open your E-wallet app 
  • Second, find the option to transfer funds
  • Third, Transfer your desired amount amount from the credit card you have registered with your E-wallet
  • Fourth, go to your ‘passbook’
  • Fifth, find here an option to transfer the money from your E-wallet to your bank account
  • Sixth, follow the prompts and fill in necessary information to transfer the funds here

Offline transfer

Ideal for situations in which you need some money in your account but don’t have any data left or are in an area without wifi, offline transfers can help get you out of a tight spot. 

ATM cash advance

If there’s an ATM and a bank branch within reach for you, this is a useful way to put some cash in your bank account. 

It’s a simple three step process:

  • First, find an ATM and bank branch close to where you are
  • Second, using your credit card, withdraw the amount you need to put in your account
  • Third, go to the bank and deposit the cash into your account

Phone call

If an ATM and bank branch are out of reach and you have no internet, another way to get instant funds is via phone call. 

  • First, contact your card provider
  • Second, request a fund transfer
  • Third, supply all the required information
  • Fourth, finish by following their steps

Cheques

Less popular for their inconvenience and slower speed compared to mobile banking alternatives, cheques are still in circulation and a handy way to secure some money for yourself. The easiest and most instantaneous way to do this is by sending a cheque to yourself.

  • First, enter ‘self’ as the payee
  • Second, fill out the rest of the required information
  • Third, deposit the cheque at a branch of your bank

Precautions for transferring money from credit card to bank account

Learn how to cancel a pending transaction

Using a credit card to transfer funds to your bank account isn’t its intended purpose. This doesn’t mean you should never do it, more that you should use it as a last resort when all other options are exhausted.

Further, while transferring without withdrawing cash circumvents the surcharge you incur when withdrawing money on your credit card, it still comes with potential drawbacks. Take certain precautions when deciding to do it. 

Exhaust all other options first

Make sure you’ve exhausted your options before opting to transfer from your credit card. This means using any other cards you have, accessing an internet connection, or borrowing from a close friend for emergency cash. 

Learn about the costs

Below we discuss the general interest rates and fees when transferring from your credit card, but each card issuer will charge specific fees. Because of this, you should be fully aware of what your card issuer is going to charge you before you do this. 

Make sure you won’t need to do it again

 This is an emergency situation, so by definition it’s not something you want to have to do again. We all need smoke alarms in our homes, but we don’t want them to go off any more than absolutely necessary. Think of transferring funds from your credit card in the same way. Plan ahead so you won’t need to rely on it.

Reasons to not transfer money from credit card to bank account

Above all, the main reason for not transferring money from your credit card to your bank account is if you have other options available. Mobile banking, debit cards, and cash are all more suitable as fund options than credit card to bank account transferral. 

Some of the other reasons to avoid transferring money from your credit card to your bank account are the costs you incur by doing it. 

High interest rates

Interest rates on cash advances are unusually high, and the interest starts accruing as soon as you take the money out. This is in contrast to a regular credit card purchase (the purpose for which credit cards are intended), where there is usually a grace period of a couple weeks on the first few purchases. 

High fees

Most credit cards include a cash advance fee. This will either be a flat fee or a charged percentage of the amount you’re taking out, up to 5%. If you’re taking out large amounts or having to do it frequently, the costs will add up. 

Terms to know when transferring money from credit card to bank account

Below are definitions of some of the major terms we’ve used throughout this article, for any clarification that might be needed. 

Bank account

Your bank account is a contract between you and the bank of your choice. In exchange for interest accrued on your funds and certain fees for their services, banks hold your money—ideally keeping it safe—and allow you to withdraw it at will. 

Within this, you will usually be provided a checking account and a savings account. Whereas savings accounts have withdrawal fees, checking accounts usually allow account holders to withdraw free of charge. 

Interest

When you borrow money, you are required to pay something for it. This is called interest. Usually expressed as an annual percentage rate, it denotes the amount the lender stands to earn when lending the money out. Interest also refers to the percentage of an investor’s share in a company or firm. 

Credit card

Credit cards allow holders to loan cash on credit, so they can pay for things without using their savings. As a credit card holder, you are required to pay back the money you have borrowed, with accrued interest, fees, and any other charges the card issuer may apply to their particular card.

Debit card

Also known as bank cards or check cards, debit cards allow you to withdraw money from your checking or savings accounts. This means the money you take out is yours, instead of on lend from a credit institution, and has no repayment plan. 

Conclusion: how to transfer money from credit card to bank account

The most important takeaway here is that, while possible, transferring funds from your credit card to your checking account is generally to be avoided. It provides a useful way to get some funds in your account if there is no other way, but you’re likely to incur higher fees than normal transactions and the interest rate is less than favourable.

That said, if you find yourself in a situation where it’s the only way to get some money in your account, make sure you know everything you need to know and try to do it as infrequently as possible. 

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