How to Transfer Money from a Credit Card to a Bank Account

Can I Transfer Money From My Credit Card to My Bank Account?

It is possible to transfer money from a credit card to your bank account, but it's generally not recommended. If you use a cash advance, for example, the card issuer typically charges a 3% to 5% cash advance fee and a high interest rate. This could make it harder to keep up with credit card payments and potentially hurt your credit scores.

Still, it is an option, and it could make sense in a financial emergency if you've already exhausted the alternatives. If you're considering this route, familiarize yourself with how the transfer works and what it may cost you.

How to Transfer Money From a Credit Card to a Bank Account

If you want to send money from your credit card to your bank account, you usually have two options: a cash advance or a balance transfer check.

Cash Advance

A cash advance is a short-term loan that allows you to withdraw cash against your credit card limit. You can receive the cash in various ways. However, interest rates, fees and repayment requirements differ from regular credit card purchases.

• Borrowing limits: Credit card companies often restrict how much of your available credit you can draw as a cash advance, and these limits vary by card issuer. You may also encounter daily cash advance limits from your credit card or bank, such as $300 or $400. Your card issuer won't allow you a cash advance if it pushes your overall credit card balance beyond your credit limit.
• Process: How you get a cash advance varies by issuer, but you can usually get one from an ATM, at a bank branch or with a convenience check. A cash advance from an ATM will require a PIN from your card issuer. Some issuers let you transfer funds online from your credit card to your checking account, or you can take out a cash advance at a bank branch and deposit the money directly into your checking account.
• Timing: You can get a cash advance right away regardless of the method you use. Unlike a typical credit card purchase, which usually has a grace period before interest starts, a cash advance begins accruing interest immediately.
• Cost: The interest rate is usually higher on cash advances than for purchases. You'll also pay a cash advance fee of around 3% to 5% of the amount borrowed, plus potential bank and ATM fees. If you need the cash advance for something you could pay for directly with your credit card, it's usually cheaper to do that.

Learn more: What Is a Cash Advance and How Does It Work?

Balance Transfer Check

A balance transfer check is typically used to move debt from a high-interest credit card, but you can also deposit the check into your bank account and use the money like a cash advance.

A balance transfer check is different from a convenience check used for a cash advance. It's usually part of a short-term promotional offer, similar to a 0% intro APR credit card promotion. It could come as a blank check in the mail that you can fill out and return, or you could receive an offer to do the process online. You can use the funds to help get through a financial hardship, and if the transfer qualifies for the promotional APR, your issuer won't consider it a cash advance.

• Borrowing limits: Specific borrowing limits vary by lender, but you won't be able to borrow more than your credit card's limit.
• Process: With a paper balance transfer check, you'll fill it out like a personal check and you can deposit it into your bank account right away. If your issuer offers an online option, you may be able to have the money sent directly to your bank account.
• Timing: The exact timing for receiving money depends on how long it takes your financial institution to clear checks or transfer funds. If you're using a balance transfer check with a promotional APR, you'll want to review your repayment terms to see how long the promotional period lasts. Make sure you repay the balance before the promotional period ends, as any remaining balance will be charged the card's normal interest rate, which could be substantially higher.
• Cost: With a balance transfer check promotion, you may pay low or no interest for a limited time. However, you'll likely pay a balance transfer fee ranging from 3% to 5% of the check's total amount.

Learn more: Should You Use a Balance Transfer Check?

Should I Transfer Money From My Credit Card to My Bank Account?

You should generally aim to avoid transferring money from your credit card to your bank account, given the costs of doing so. But if you're facing a financial emergency without a better option, review both ways of accessing the money and how each one might affect you.

Is a Cash Advance a Good Idea?

A cash advance comes with serious drawbacks, which makes it a poor option in most cases. You'll typically pay high transaction fees and interest rates with no grace period. That means interest starts accumulating the same day you take the advance.

Consider your repayment timeline before taking out a cash advance. It may make sense if you're in a financial crunch and you're confident you can repay the cash advance right away to keep interest charges low. But if repayment will take longer, those interest charges could be substantial.

Consider a Balance Transfer Check Instead

If you urgently need to transfer money from your credit card, it's better to use a balance transfer check than a traditional cash advance if you have the option. They both accomplish the same thing, allowing you to borrow against your credit card limit, but balance transfer checks usually have a much lower interest rate. Some card issuers even offer a promotional 0% interest rate for a limited time.

How Transferring Money From a Credit Card Can Affect Your Credit Score

Moving money from a credit card could indirectly impact your credit score by raising your credit utilization rate. This rate measures how much of your total credit you're using on revolving accounts like credit cards. It's the second most important factor determining your credit scores after your payment history. Debt payments are responsible for 35% of your FICO^® Score^{☉ Θ}, used by 90% of top lenders, while credit utilization accounts for 30%.

Experts generally recommend keeping your credit usage below 30% of your available limit to avoid more serious damage to your credit. While that's more of a guideline than a hard rule, the lower your credit utilization, the better. For perspective, the highest credit score achievers typically have credit utilization ratios in the single digits.

Example: Let's say the total credit limit for all of your credit cards is $10,000, while your total balance across all cards is $3,000. In this case, your credit utilization ratio is 30%. But if you take a cash advance of $2,000, now you're using half of your total credit limit, or 50% credit utilization. A ratio this high may negatively impact your credit score.

Alternative Ways to Get Cash

A cash advance should generally be thought of as a last resort option after you've explored alternative options to get cash right away.

• Get a personal loan. These loans are a good option if you need a substantial amount as they offer up to $100,000. Personal loans typically come with fixed rates and repayment terms ranging from one to seven years. The loan's APR could be as low as 8% or as high as 36%, depending on your credit. With good credit, your loan rate could fall well below what you might pay with a cash advance.
• Borrow from family or friends. Sure, asking close friends and relatives for financial assistance is unpleasant. But so is paying APRs near 30% for a cash advance. Drawing up an agreement stating what you owe and when you'll pay it can set expectations and help to protect your relationship long after you've repaid the debt.
• Cash out your credit card rewards. If you've earned cash back on a rewards card, you may be able to redeem it as cash back to your bank account or receive it by check.
• Tap your home equity. If you own your home and have sufficient home equity, you could borrow against it with a home equity loan or line of credit. Just be aware that your home serves as collateral on the loan, which means you could lose your home if you don't pay back the loan.
• Explore other relief options. Do everything possible to resist high-cost borrowing options like cash advances and payday loans, which are more enticing when you're running out of options. You may be better off looking into government and nonprofit programs that offer financial assistance and relief.

Learn more: Alternatives to Credit Card Cash Advances

The Bottom Line

Getting a cash advance or a balance transfer check are two common ways to get money from your credit card to your bank account. But be aware that these options can be costly. Cash advances usually come with high interest rates and fees. Balance transfer checks typically charge a transfer fee and may also charge interest. Either option can increase your credit utilization ratio, which could hurt your credit score.

If your card's terms are too expensive or restrictive, consider alternative borrowing methods. You can also compare credit cards based on your profile to find one with better terms and lower cash advance fees.