Amanda Smith
Georgia Rose
Athena Cocoves
Yes, you can transfer money from your credit card to your bank account, but it’s costly and not recommended. This process is called a ‘cash advance’ and typically comes with high fees and interest rates that start accumulating immediately. It’s one of the more expensive ways to borrow money.
Before relying on this option to access emergency funds, here’s what you should consider.
How a cash advance transfers money
Withdrawing money from your credit card is called a cash advance. You can do this through an ATM withdrawal or by transferring funds online to your bank account. Either way, fees and interest start piling up immediately.
Usually, every time you do this, you’re charged a cash advance fee, such as 3% or $3 per transaction, whichever is greater.
The amount you move to your bank account also incurs interest from the day you make the transfer rather than when your statement is due or after any interest-free days that commonly apply to regular purchases. That means you need to repay the funds you withdraw immediately to avoid interest charges from spiraling out of control.
Cash advance vs balance transfer
Don’t confuse a cash advance with a balance transfer.
A balance transfer moves debt from one card to another, typically to secure a lower interest rate and consolidate payments. Promotional balance transfers, such as 0% for 12 months, generally do this most effectively. These offers aim to reduce the interest you pay while giving you time to pay down your transferred balance.
A cash advance, on the other hand, is a costly, short-term solution. While this allows you to use your credit card as a cash source — effectively borrowing money directly from your card — you’ll pay heavily for this convenience.
» MORE: When is a credit card right for an emergency?
Types of cards that allow transfers
Most financial institutions, including the Big Four, allow you to transfer money from a credit card to a bank account. There’s no specific credit card type designed for cash withdrawals or transfers — but cards with a lower cash advance interest rate and fees may be slightly more affordable and, therefore, preferable.
Cash advance interest rates can range from 8.99% to 25.99%, depending on the card. But most sit at 21.99%, typically higher than the purchase interest rate. And, just another remind that interest is charged daily for cash advances — from the moment you make the transaction to however long it takes to repay it — which is why they can create debt snowballs.
Common restrictions to know
Check the specifications of your bank and how they treat cash advances. Depending on your credit card, the daily cash limit and your current debt, there could be limitations.
In some cases, banks may even block cash advances entirely, as is the case with cards like CommBank Neo, NAB StraightUP and Westpac Lite.
Alternatively, your bank may provide options to allow you to set your own card controls so you can restrict your daily cash limit or block access to cash advances altogether.
How to transfer funds from a credit card to a bank account
Transferring in person:
The easiest way to transfer money from your credit card to your bank account is to withdraw cash from an ATM and deposit it into your account.
However, ATMs often charge fees for withdrawals, which are in addition to any cash advance fees imposed by your credit card issuer — not to mention any interest charges or other fees.
Let’s say you withdraw $500 from an ATM that charges $2 per transaction. Plus, your card’s cash advance fee is 3% with a 21.99% interest rate. You’d be paying $17 for the privilege of removing the money from the ATM, and the debt would grow to roughly $545 in 90 days.
In short, moving cash from your credit card to your bank can be extremely costly.
Transferring via mobile or online banking:
- Sign into your online banking (app or desktop).
- Navigate to the Transfer section, if available.
- Complete any applicable forms, and provide the bank details you wish the cash to be sent to.
- Complete the transfer.
Online transfers can take a few days to complete.
Transferring on the phone:
- Call your credit card issuer and inform them you’d like to process a cash advance.
- Confirm the amount, the credit card and bank account.
- Follow the representative’s prompts.
Allow a few days to receive the funds.
What to consider before you make a transfer
If you absolutely need to transfer funds from your card to your bank account, consider the risks by asking yourself the following questions before pulling the trigger:
- How much can you transfer? The daily cash limit on your card and available credit determines how much can be transferred or withdrawn.
- How long will it take to transfer? Depending on how you transfer the money, processing times can take a few minutes or a few days.
- What are the costs? It depends on who you bank with, but expect to pay approximately 3% of the transaction amount and 21.99% interest on the debt. You can’t avoid the cash advance fee, but you can control how much interest you pay by paying the debt off as quickly as possible.
Alternatives
Reflect on your reason
If you need the cash to pay your rent or a utility bill, talk to the company you owe money to and see if you can either get an extension. If you don’t have other options, weigh up the costs to consider whether using your credit card for the payment is a better option.
Depending on where you live, you may be eligible for rental assistance programs, crisis payments, a no-interest loan or concessions to help make ends meet.
Find another way to borrow
Alternatively, you could dip into your savings and pay it back. Or borrow money from a family member or friend.
You could also consider a low-interest personal loan or some kind of longer-term support from your bank. Buy Now, Pay Later (BNPL) or short-term lenders often charge exorbitant fees in exchange for the convenience of fast cash.
Plan ahead
With all matters of personal finance, it pays to make decisions with a long-term outlook.
Good budgeting and money management won’t prevent unexpected expenses, but knowing you have money set aside for emergencies can help you avoid reaching for your credit card.
If you need to use your credit card to transfer money to your bank account, don’t panic. Just pay it back as quickly as possible.
Frequently asked questions
Yes, you can transfer money to the bank account linked to your debit card through a cash advance. Be prepared to pay a cash advance fee (usually around 3% of the amount) and interest that begins accruing immediately on the day you make the transfer.
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