How to Transfer Money With a Credit Card (And When It Actually Makes Sense)

Credit cards can move money, but not the way debit cards or bank transfers do

A credit card is not a money-transfer tool in the traditional sense. You cannot walk into a bank and hand over your credit card to send cash to someone else's account. What you can do is use your credit card to get cash out (called a cash advance), move money into a linked bank account (called a balance transfer), or pay someone directly through a payment app that accepts credit cards. Each method works differently, costs different amounts, and makes sense in different situations.

The key thing to understand: your credit card company is lending you money when you use it. When you transfer money or take out cash, you are borrowing from that lender, not moving your own money. That borrowed money starts accruing interest immediately — usually at a higher rate than your regular purchase interest rate — and you will owe it back.

Key Takeaways

• Cash advances let you withdraw money from an ATM or bank using your credit card, but they charge an upfront fee (usually 3 to 5 percent) plus daily interest starting right away.
• Balance transfers move debt from one credit card to another and may offer a low or zero interest rate for a set period, but only if you are moving existing balances, not getting new cash.
• Payment apps like Venmo, PayPal, and Square Cash accept credit cards to send money to other people, but charge a fee (usually 2 to 3 percent) unless you use a debit card or bank transfer instead.
• Credit card transfers cost more than bank transfers or debit card payments because the credit card company charges fees and interest, so use them only when you have no other option.
• Your credit card company may decline a transfer or set a limit lower than your credit limit, so check your terms or call before you count on moving a specific amount.

Cash advances: Getting money out of an ATM with your credit card

A cash advance is the most direct way to get physical money using your credit card. You go to an ATM, insert your card, enter your PIN, and withdraw cash just as you would with a debit card. The difference is that you are borrowing from your credit card company, not pulling from your own bank account.

The cost hits immediately. Most credit card companies charge a cash advance fee — typically 3 to 5 percent of the amount you withdraw, with a minimum fee of $5 to $10. So if you withdraw $200, you might pay $6 to $10 just for taking out the cash. On top of that, interest starts accruing the same day. Unlike purchases, which often have a grace period before interest kicks in, cash advances charge interest from day one. The interest rate is usually higher than your regular purchase APR — often 2 to 5 percentage points higher.

Cash advances also count against a separate limit. Your credit card company may set a cash advance limit that is lower than your total credit limit. For example, you might have a $5,000 credit limit but only a $1,000 cash advance limit. Check your card's terms or call the customer service number on the back of your card to find out what your limit is before you try to withdraw.

Balance transfers: Moving debt between credit cards

A balance transfer moves an existing balance from one credit card to another. This is different from getting cash — you are not withdrawing money. Instead, the new card's issuer pays off your old card's balance, and you now owe that amount to the new card company.

Balance transfers are useful when you are trying to lower your interest rate. Many credit card companies offer a promotional period — often 6 to 21 months — during which the interest rate on transferred balances is zero percent or very low. If you have a high-interest balance on an old card, moving it to a card with a zero-percent promotional period can save you hundreds in interest while you pay down the debt.

The catch: you pay a balance transfer fee upfront, usually 3 to 5 percent of the amount transferred. If you transfer $3,000, you might pay $90 to $150 in fees. The promotional rate applies only to the transferred balance, not to new purchases you make on the new card. And when the promotional period ends, the regular interest rate kicks in on any remaining balance.

Balance transfers also require that you have an existing balance to move. You cannot use a balance transfer to get new cash — only to move debt you already owe.

Payment apps: Sending money to other people using your credit card

Apps like Venmo, PayPal, Square Cash, and Google Pay let you send money to other people directly from your phone. Most of these apps accept credit cards as a payment method, which means you can technically use your credit card to fund a transfer to someone else.

However, using a credit card on these apps costs more than other payment methods. Venmo, for example, charges a 3 percent fee when you send money using a credit card, but charges nothing when you use a debit card or bank transfer. PayPal charges 2.2 percent plus $0.30 for credit card transfers. Square Cash charges 1.5 percent for credit card payments. These fees add up quickly on larger amounts.

Beyond the fee, remember that you are borrowing money from your credit card company. The money leaves the recipient's account immediately, but you do not pay back your credit card company until your statement is due. If you cannot pay the full balance when the bill arrives, you will owe interest on top of the transfer fee you already paid.

Most people use these apps with a debit card or bank transfer instead, which is faster and cheaper. Use your credit card on these apps only if you have no other payment method available and you are certain you can pay back the full amount before interest starts.

Wire transfers and ACH transfers: What credit cards cannot do

Some people ask whether they can use a credit card to send money via wire transfer or ACH transfer (the standard bank-to-bank transfer method). The answer is no — credit cards do not work with these systems. Wire transfers and ACH transfers move money directly from one bank account to another. A credit card is not a bank account; it is a line of credit.

If you need to send money via wire or ACH, you will need to use your actual bank account. If you do not have access to your bank account, you can sometimes use a cash advance to withdraw money and then deposit it into your bank account, but this adds extra steps and extra fees.

When credit card transfers make sense (and when they do not)

Credit card transfers are expensive, so use them only when you have a specific reason. They make sense if you are moving a high-interest balance to a zero-percent promotional card and you are confident you can pay it off before the rate goes back up. They also make sense if you need cash urgently and have no other way to get it — though even then, a personal loan or line of credit from your bank would usually be cheaper.

Credit card transfers do not make sense for routine money movement. If you need to send money to a friend, use a debit card or bank transfer through a payment app. If you need to move money between your own accounts, use your bank's transfer system. If you need cash, use an ATM with your debit card. Save your credit card for purchases where you can pay the balance in full and avoid interest altogether.

Fees and interest rates vary by card and by situation

Every credit card company sets its own fees and interest rates. Cash advance fees range from 3 to 5 percent, but some cards charge flat fees instead. Balance transfer fees also range from 3 to 5 percent. Interest rates on cash advances and transferred balances vary by card and by your creditworthiness. A card issuer may offer a zero-percent promotional rate on balance transfers to new cardholders but not to existing ones.

Before you transfer money using your credit card, check your card's terms or call the customer service number on the back of your card. Ask specifically about the fee, the interest rate, and any limits on the amount you can transfer. This takes five minutes and can save you from an unexpected charge.

Frequently Asked Questions

Can I use my credit card to pay someone's bill directly?

Not directly. You cannot give your credit card number to a utility company or landlord and have them charge it as a payment method (most do not accept credit cards for this reason). You can use a payment app to send money to the person, or you can take a cash advance and give them the cash, but both cost more than a bank transfer would.

What happens if I cannot pay back a credit card transfer?

Interest will accrue on the unpaid balance, and the amount you owe will grow each month. The interest rate is usually higher for transfers than for regular purchases. If you miss payments, your credit score will drop and the card issuer may raise your interest rate further or close your account.

Is a balance transfer the same as a cash advance?

No. A balance transfer moves an existing debt from one card to another. A cash advance withdraws physical cash from an ATM. Balance transfers often have lower fees and promotional interest rates, while cash advances charge higher interest from day one.

Can I transfer money from my credit card to my bank account?

Not directly through most banks. You can take a cash advance and deposit the cash into your bank account, but you will pay the cash advance fee and interest. Some credit card companies offer a feature that lets you move money into a linked bank account, but this is rare and still counts as a cash advance.

Why do credit card transfers cost so much?

Because you are borrowing money from the credit card company, not moving your own money. The fees and interest are how the company makes money on the transaction. Bank transfers and debit card payments are cheaper because they move money you already have.