If you need quick access to cash, you may be able to get a short-term loan in the form of a money transfer or cash advance from a credit card. Using a fairly simple process, you can transfer money from a credit card to a debit card. However, you can probably expect to get hit with a fee and interest charges. Plus, you’ll need to pay back the transferred amount.
Key Points
• Money can typically be transferred from a credit card as cash, which is essentially a short-term loan.
• It’s wise to understand that credit card cash advances can come with a higher interest rate and fees.
• There may be a cap or a limit regarding how large a cash advance you can obtain from your credit card.
• Credit card cash advances may be obtained via ATMs, a bank branch visit, a payment app, or a check.
• Alternatives to a credit card cash advance can include borrowing from friends and family, taking out a personal loan, or perhaps dipping into an emergency fund.
What Is a Money Transfer Credit Card?
As the name implies, a money transfer credit card is a card that allows you to move money from your credit card to a debit card or to your bank account.
Many credit card issuers allow you to make a credit card advance. As a cardholder, you can take out a certain amount of cash against your line of credit, which is what a credit card is. These cash advances usually come with fees and higher interest rates.
Can You Transfer Money From a Credit Card to a Debit Card?
While it’s typically more common to transfer a cash advance from a credit card to a bank account, you can usually send money from a credit card to a debit card. You can make a money transfer to a debit card in your own name, or to another account holder, effectively allowing you to send money with a credit card to, say, a friend and family.
The credit card process for how to transfer credit card money to a debit card is fairly similar to moving money from a credit card to a bank account. Usually, you’ll need to provide the following information:
• Name on the card
• Card number
• Expiration date
• Bank account number (in some cases)
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Factors to Consider Before Transferring Money From a Credit Card
Before you transfer money from a credit card to a debit card, here are a few thing to mull over:
• There are caps on a cash advance. Credit cards usually have a cap on a cash advance. The exact limit depends on the rules for a credit card set by the credit card issuer. For instance, it might be a set amount, such as $5,000, or it might be a percentage of your personal credit limit, such as 15%.
• You might have to step foot inside a bank. If your credit card has a PIN, similar to a debit card, then you’ll be able to get a cash advance from an ATM. But if you want to do a money transfer from a credit card to your bank account or debit card, you might need to go to a brick-and-mortar location of a physical bank.
• Cash advances could have an impact on your credit score. The good news is that cash advances don’t require a hard pull of your credit, which could hurt your score. However, taking out a cash advance can impact your credit by increasing your credit utilization ratio. That’s because carrying a higher balance ups your credit usage, which in turn can bring down your score.
• You won’t earn rewards. The good news is that cash advances don’t require a hard pull of your credit, which could hurt your score. However, taking out a cash advance can impact your credit by increasing your credit utilization ratio. That’s because carrying a higher balance ups your credit usage, which in turn can bring down your score.
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How Much Does Transferring Money From a Credit Card Cost?
Nothing in life is free, and this includes money transfers from a credit card. Here are some costs that go into a credit card money transfer:
• Cash advance fee: Just like with balance transfer credit cards, you’ll typically owe a fee to do a money transfer from a credit card to either your debit card or bank account. The fee varies depending on the card, and it might be a flat fee or a percentage of the amount of the advance. For instance, the fee might be $10 or 5% of the cash advance amount, whichever is greater.
• Cash advance APR: The annual percentage rate (APR) for a cash advance is usually higher (sometimes significantly so) than the standard APR that comes with your card. Additionally, with standard purchases on a credit card, you have a grace period between the end of the billing period and the date your payment is due. During that time, you won’t be charged interest. When you transfer money from a credit card to a debit card, however, there’s no grace period. That means you’ll be charged interest from the time you take a cash advance.
• Late charges, if applicable: If you’re late on a payment, you’ll most likely get hit with a late fee.
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Is It Safe to Transfer Money From a Credit Card to a Debit Card?
For the most part, transferring money from a credit card to a debit card is pretty secure. Banks have built-in security features, so moving money between cards or to a bank account is generally considered safe.
Once you’ve sent your payment, you may want to check in with the intended recipient to ensure they received the funds in the credit card to debit card transfer.
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Alternatives to Transferring Money From a Credit Card to a Debit Card
Moving money from a credit card to a debit card is just one method of sending money. There are other ways you can tap into your credit card limit in the form of cash, including:
• Writing a check: In lieu of getting that money transferred to your debit card, the credit card company might mail you a check. You can either use it as a personal check or to make a deposit into your bank account.
• Pulling money from an ATM: If your credit card comes with a PIN, you can withdraw money via a cash advance.
• Using a payment app: You can also likely use popular payment apps like PayPal or Square’s Cash App to send money to someone else with your credit. Once you’ve linked your card, you may have the option to send money to someone else. Keep in mind that you or the recipient will likely incur fees.
And, of course, you might avoid taking out a cash advance entirely. If you’re in a pinch, you could also explore options like borrowing money from a friend or family member, taking out a personal loan with a competitive interest rate, or possibly dipping into your emergency fund. All of these alternatives will allow you to avoid the fees and interest charges that can accompany the transfer money from a credit card to a debit card.
Recommended: How to Avoid Interest on a Credit Card
The Takeaway
A cash advance by way of transferring money from a credit card to a debit card could be a quick, easy way to access money. The trade-off is that you’ll likely be paying high interest charges and a fee. Before proceeding, make sure it’s the right choice for you and your needs. Also, be careful not to take more cash than you need, as this will have an effect on your credit utilization.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
Can I transfer money from my credit card to my debit card without paying interest?
No, transferring money from your credit card to debit card comes with interest charges. The APR for a cash advance is typically higher than the standard APR on the card. Plus, you won’t get a grace period, so interest will begin accruing immediately.
Is it better to get a personal loan or transfer money from my credit card?
A personal loan is generally preferable to transferring money from a credit card. That’s because it’s possible to find no-fee personal loans, whereas cash advances generally carry fees. Plus, the interest rate on a personal loan is likely lower than the APR you’d be charged on a cash advance. Explore your options to find the right financial moves to suit your needs and situation.
Can I withdraw cash using a credit card?
Yes, you can take out cash using a credit card as a cash advance. Be aware of (and wary of) the fees, rates, and fact that there’s no grace period on accruing interest before proceeding.
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