How to transfer money from a credit card to a bank account
Money transfers from your card can help clear short-term debt. Find out how cash transfers work, which credit cards can help and what to consider before you take one out.
Can you transfer money from a credit card to a bank account?
Yes, depending on the type of credit card you’ve got, it’s possible to borrow money from the card and move it into your current account.
If you need cash in a hurry - perhaps for an unexpected bill or for an overdraft that’s charging you very high interest - a money transfer can help with your cashflow.
- Transferring money from your credit card can help if you need to pay off a short-term debt or unexpected bill
- Credit card cash withdrawals or cash advances usually come at a high price
- Money transfer credit cards with an introductory low-interest rate can be a fast and cheaper way to access cash
- You should always aim to clear the balance on a money transfer card before the higher rate kicks in
Is it a good idea?
This depends on your credit card and how you transfer the money, as well as your financial situation.
Using your card to withdraw cash (and then paying it into your current account) means you’ll usually be charged expensive interest by the card provider. And sometimes there’ll be a fee on top.
You could use what’s called a cash advance - when you arrange with the card provider for them to transfer money directly into your account.
But again this can be an expensive option and could also damage your credit score.
An alternative is using a money transfer card, which won’t affect your credit rating and could provide the lump sum you need. Although you’ll need to make sure you can pay off the balance before the low-interest period ends.
What’s a money transfer card?
A money transfer credit card is a special type of card that’s designed to help you borrow money.
Usually, they come with an interest-free or low-interest introductory period and allow you to transfer money directly into your current account
The money can be spent however you like, but it’s often used to pay off short-term debts like overdrafts or loans with higher rates of interest. Or you might use it to help pay for a large purchase, like a new car.
Can you transfer money from a credit card to a bank account without charges?
Unfortunately, there isn’t a way to transfer money from a credit card to your bank account without being charged.
However, some ways of doing this are much cheaper than others.
Using your card to withdraw cash from a branch or cash machine, or using a cash advance, will mean facing very high interest rates from the day the money’s taken out.
This is as well as facing a fee and it affecting your credit rating.
Instead, it’s cheaper to use a money transfer credit card - which won’t impact your credit history.
You’ll be charged a small fee, usually between 1% and 4% of the money being transferred. But as long as you pay the balance off by the time the low-interest period ends, you won’t have to pay any interest.
When can you transfer money from a money transfer credit card?
With most money transfer credit cards, to get the low or 0% interest deal, you’ll need to make the transfer within the first 60 or 90 days of opening the account.
Be aware that your transfer will still be subject to security checks by the card provider, so receiving the money is not guaranteed.
And remember that you’ll need to pay a transfer fee which will be added to your balance.
How long does it take to transfer money from a credit card to a bank account?
This will largely depend on your bank, but with some you’ll find the money in your account as quickly as the end of the next working day.
If you’ve just applied for a money transfer credit card this may take a little longer while your credit history and financial situation is being checked.
And if you request a transfer on the weekend or outside business hours this can also cause a delay.
How much can you transfer?
You’ll need to compare card providers, but most will allow you to transfer between 90% to 95% of your credit limit. However, it's important to consider your credit utilisation ratio as this might affect your credit score. Credit utilisation refers to what percentage of the credit available to you that you're actually using and most lenders would prefer you keep the percentage to under 30%.
Sometimes there’ll also be a minimum amount for the transfer, which can be around £100.
And be aware that once the money transfer has been processed most providers won’t let you cancel it and won’t return any transfer fees.
Things to consider before transferring money
When it comes to choosing whether to move money from your credit card into your bank account, you should consider the following:
- You’ll need a good credit history to be accepted for a money transfer
- A money transfer credit card is a much cheaper option to taking out a cash advance
- Some providers won’t let you use a transfer to pay off a loan you already owe them
- The amount you can transfer from your card will depend on your credit limit
- You’ll need to factor in the transfer fee to the cost of your repayments
- You should aim to pay off the balance before the standard rate kicks in
- If you miss a payment your low-interest rate might be replaced with the standard rate
- Applying for a money transfer soon after you’ve been rejected for one may affect your credit score and chances of being accepted in the future
What are the alternatives?
Although transferring money from your credit card may seem like a quick and easy way of accessing money, it’s always worth doing your research and considering other options:
Dip into your savings
While it’s nice to have some cash saved for a rainy day, using it now could help you reduce your debt and the amount of interest you’re paying.
Pay higher monthly repayments
Try to pay off more each month with overpayments so your loan can end earlier, but check if there are any charges to do this first
Check for any forgotten bank accounts
There are billions of pounds that haven’t been claimed in old and forgotten bank accounts. Use www.mylostaccount.org.uk to help you find any cash you might have lying around that you didn’t know about.
Consider another type of loan
If you need a large amount of money for something like a new car or major home improvements, a personal or secured loan might be a better way of borrowing money at a lower interest rate over a longer period.