RateCity.com.au
powering smart financial decisions

How can I transfer money from my credit card to a bank account instantly?

How can I transfer money from my credit card to a bank account instantly?

Credit cards are a great way to get your hands on cash when you are in a tight spot. However, some scenarios won’t allow your credit card to be used, such as buying stocks, paying your mortgage, or sending a money order.

At times like these, you may want to consider taking a cash advance on your credit card and making an online transfer from your credit card to your bank account.

Things to keep in mind before transferring money from your credit card

There could be charges when using your credit card to transfer funds to a bank account. Make sure you are well aware of these costs beforehand.

These charges may include:

  • Cash advance interest rate: Your transfer could be charged interest, and it’s usually higher than the interest rate charged for regular credit card purchases.
  • Cash advance fee: You'll probably be required to pay a fee of around 3% of the total that you transfer.
  • Transaction fees: Even if your bank transfer is not processed as a cash advance transaction, you might be charged a fee.
  • No interest-free days: You'll be charged interest immediately.
  • International transfers: In the case of an international transfer, you'll probably also have to pay an international transaction fee.

How can you transfer cash from credit card to bank account?

Before you make the transfer, you'll need to check if your credit card provider allows the transfer. While each provider will probably have slightly different steps, the basic process for making the transfer will look something like the below:

  1. Making the transfer over the phone
  2. Call your credit card provider and verify your account.
  3. Make your transfer request.
  4. Verify the amount that you wish to transfer to the bank account.
  5. Provide the bank account number, BSB and any other requested details.
  6. Follow the steps to complete your transaction.

Making the transfer online or through mobile banking:

  1. Log in to your credit card account.
  2. Find and choose the ‘Transfer’ option.
  3. Type in the amount you wish to transfer.
  4. Enter your bank account number, BSB and any other required details.
  5. Follow the indicated steps to complete the transaction.

If your credit card and transaction account are with the same bank, the money is usually available within a day. If the transfer is to a different bank, it could take 2-3 working days for the funds to appear.

Disadvantages to transferring from a credit card to a transaction account

It’s rarely a good idea to transfer money from a credit card to your bank account when there are better and cheaper alternatives available.

A cash advance on your credit card attracts a higher interest rate than on a credit card purchase as well as extra fees. Additionally, while a credit card purchase may give you a no-interest grace period for a few weeks, cash advances have no grace period. The interest meter starts as soon as you take the cash out.

If it’s an unavoidable emergency and you need money immediately you should first consider options that charge lower interest to avoid going into debt. You could consider a home equity line of credit, a low-interest personal loan, or even a new credit card with a 0% interest introductory offer.

What alternative methods can I use to transfer funds?

If you find yourself unable to transfer funds from your credit card to a bank account, consider the following options:

  • Get an ATM cash advance: You could withdraw money from the ATM using your credit card and deposit the money directly into the bank account.
  • A personal loan: If you need money for an emergency, a personal loan might be one alternative option worth considering. The interest rate charged on a personal loan generally speaking may be less expensive than a credit card cash advance in the medium to long term.
  • Make an international transfer: If you wish to send funds to an overseas account, you could make an international transfer.

Did you find this helpful? Why not share this article?

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

Advertisement

RateCity

More credit cards articles

More articles? Read more here

Learn more about credit cards