It is possible to transfer money from credit card to bank account – but you’ll need to be careful how you go about it. We show you how to avoid the pitfalls...
Compare 0% Money Transfer credit cards.
Essentially money transfers are like balance transfers from your credit card to your bank account, rather than from one credit card to another. Theoretically, it sounds good – but you can end up overpaying if you don’t do it correctly.
We take a look at what you can do, and how it can go wrong.
Can I transfer money from my credit card?
Most credit cards won't allow you to transfer money directly from your credit card to your bank account (sometimes called a “super balance transfer”).
Of those that do, many charge significant handling fees up front in addition to high interest rates on the money you move. It simply isn’t worthwhile.
However, if you get a dedicated 0% money transfer credit card you will be able to transfer money from your credit card to a bank account for minimum cost.
What are 0% money transfer credit cards?
0% money transfer cards are standard credit cards in almost every aspect – but one.
Their defining feature is that they will let you transfer cash from your credit card to your current account interest free for a set period of time.
Providing you make at least the minimum repayments, you won’t start paying any interest on the money that you move until the interest free period is up.
This gives you a cheap and convenient way to borrow cash that you can spend as you see fit.
Although you will have to pay a money transfer fee (often called a handling fee) when you make the transfer. This is usually around 4% of the total.
As with all credit cards, you will have to pay back anything you borrow. However, if you pay the sum off within the 0% introductory period then you won’t need to worry about it growing – no interest will be added.
How to get the best money transfer credit cards
The most important thing to do is shop around and compare 0% money transfer credit cards before you apply.
Bear in mind you’ll need to make at least the minimum repayments each month so you don't forfeit the interest free period and get charged penalty fees and interest.
The first thing to do is decide whether you want to use the card for making purchases or balance transfers as well as for making a money transfer. If so then you'll need to look for the card that offers the best combination of interest free periods and charges on all three. If the introductory 0% periods aren't equal in length remember to check how and when interest will be charged and aim to pay off the balance before your borrowing starts costing you.
If you don’t want to use the card for any purpose other than making a money transfer then your priority is going to be getting the longest money transfer deal for the cheapest handling fee.
Before you apply, consider how long you it will take you to pay off the amount you plan to borrow. Then compare the cards that offer at least this length of time interest free to see which charges the lowest fees and holds the key to the cheapest money transfers.
You can find the best money transfer credit cards for your circumstances using our 0% money transfer credit card comparison table. Check the terms and conditions of every card that you compare so that you’re not caught out.
Once you apply you'll need to make your money transfer as soon as possible so you don't miss the window of opportunity to do so (this tends to be around 60 days from getting approved for the card).
You'll also need to have a plan in place to clear the card’s balance: whether this is saving the necessary money to pay off what you owe at the end of the 0% period, or arranging a 0% balance transfer before you are charged interest.
What not to do
If you need to get your hands on some extra cash, the major thing to avoid probably sounds like the most convenient solution: withdrawing cash from an ATM using your credit card.
Even if you have one of the best money transfer cards out there, you should only ever withdraw cash on your credit card (called a cash advance) in an emergency. Here’s why:
Cash taken out from a hole-in-the-wall isn’t eligible for any interest free period
- You'll be charged interest from the minute you get your hands on the cash, and the APR will be much higher in the first place, sometimes reaching over 30%
- You will incur a transaction charge on the amount you borrow; this is usually a percentage of the cash you've withdrawn subject to a minimum that can be as high as £5.
- Read our guide, the Real Cost of Credit Card Cash Advances for more information.
In most cases a credit card money transfer is by far the cheaper option, if you can find the right card.
Alternatively, for other ways of borrowing cash quickly read our guide, The Cheapest Way to Borrow Money Fast.