Can I transfer money from my credit card to my bank account?
Yes, you can usually transfer money from your credit card to your bank account. However, it's not always the best decision, and the options depend on the type of card you have. Some cards may not allow a money transfer option at all.
5 min read
In a nutshell
- If needed, transferring money from your credit card can provide quick access to cash for emergencies or to cover expenses that don’t accept credit cards.
- Be mindful of higher interest rates and fees associated with cash advances and money transfers from credit cards. Always review your card’s terms and conditions.
- Your eligibility for a money transfer card depends on age, residency, and credit history. Poor credit history can affect your application success.
- Make timely repayments to avoid extra charges and negative impacts on your credit report. Understand your card’s fees and terms to manage your finances effectively.
How to transfer money from a credit card to a bank account
There are a few methods to transfer money from your credit card to your bank account:
Cash advance
A cash advance allows you to withdraw cash from your credit card, which you can then deposit into your bank account. This method can provide quick access to funds, but there are important considerations to keep in mind.
How does a cash advance work?
- Check your credit card's terms: Before going ahead with a cash advance, review your credit card's terms and conditions to understand any fees and interest rates that may apply. Cash advances often have higher interest rates and additional fees compared to regular purchases.
- Find your credit card's cash advance feature: Log in to your online banking account or mobile banking app. Look for the option to request a cash advance. This process may vary depending on your card issuer.
- Withdraw cash:
- In-person: Visit your bank's branch and request a cash advance at the counter. You will likely need to present identification and your credit card.
- Online transfer: Some credit card issuers allow you to transfer cash advances directly to your bank account through their online banking portal. Follow the instructions provided by your card issuer for this process.
- Deposit the cash: If you received the cash in person, you can deposit it into your bank account using a deposit machine or by visiting your bank's branch. If you transferred the funds online, they should already be in your bank account.
Considerations:
- Higher interest rates: Cash advances typically come with higher interest rates compared to regular credit card purchases. Interest starts building up immediately, so it's important to repay the advance as soon as possible.
- Cash advance fees: There is usually a fee for cash advances, typically around 3-5% of the withdrawn amount. Be aware of these additional costs before proceeding.
- Impact on credit utilisation: Taking out a cash advance can increase your credit card's balance, potentially affecting your credit utilisation ratio and your credit score.
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Money transfer card
A money transfer card allows you to transfer money directly into your bank account. Many of these cards come with an introductory offer of a 0% interest rate for a fixed period. However, some do charge interest, so check the details with the provider first.
If you use your card to transfer money, you’ll need to make monthly repayments until you’ve paid back the borrowed amount. Missing the minimum repayment each month can result in a late payment fee and negatively impact your credit score. Also, once the fixed term for the 0% interest rate ends, you’ll be charged the regular interest rate.
How does a money transfer card work?
- You'll agree on a maximum card limit with your lender, similar to other credit cards.
- Transfer an amount from your money transfer card directly to your current account.
- Note any minimum and maximum transfer amounts set by your card issuer.
- Use your debit card after the transfer to make payments or withdraw cash as usual.
- Remember, transferring money from your credit card typically incurs a fee, typically up to 5% of the transferred balance.
Who’s eligible for a money transfer card?
To be eligible for a money transfer card, you’ll usually need to:
- Be 18 years old or older.
- Be a UK resident.
- Have a UK bank account.
You’re less likely to be approved for a money transfer card if you’re a student or unemployed. Your credit history will also play a big part in your application’s success. A poor credit history, including county court judgments (CCJs), Individual Voluntary Agreements (IVA), and defaults, can reduce your chances of approval.
If you’ve recently been rejected for a money transfer card, avoid applying for another one too soon, as it will show up on your credit report and might reduce your chances of being accepted for credit in the future. Use eligibility checkers before you apply to gauge your chances of approval.
What to remember about money transfer cards
- Make repayments on time: Late repayments will result in extra charges and negatively affect your credit report.
- Make at least the minimum repayment each month: Regular payments improve your credit rating and demonstrate to lenders that you’re a reliable borrower.
- Spend within your limits: Avoid spending more than you can afford, as it may lead to financial difficulties when it comes time to repay.
- Remember when the 0% offer ends: Once the promotional period ends, the regular interest rate will apply to any outstanding balance.
- Understand your card’s terms and conditions: Familiarise yourself with any fees for transferring money and the percentage of your credit limit you can transfer.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
