How to transfer money from your credit card to a bank account

If you’ve got a credit card, you might be wondering whether you could transfer some of the available money from your card into your bank account. Perhaps you’ve got a small overdraft you’d like to clear or maybe you just want some cash in your current account. 

Whatever the reason, you’ll be glad to hear that you can usually do this, and there are a couple of approaches you can take. But it does depend on what credit card you have.

How to transfer funds from a credit card to a bank account with a money transfer card 

If you’ve got a special money transfer credit card, you’re in luck. This is the simplest way to transfer funds from a credit card to a bank account, as it’s been designed for this purpose. That means the charges and interest for transferring money are usually lower.

The other thing you could do is take cash out from an ATM using your credit card. You could then deposit the cash into your bank account. 

However, it’s important to be aware that taking cash out on a credit card can be very expensive. You’ll usually start paying interest from the moment you take the cash, and you may even pay fees too. This tends to be the case even if you’re still in your 0% interest period, so it’s best to avoid it if you can.

However you do it, once you’ve transferred cash from your credit card to your bank account, you’ll be able to use your bank debit card to pay for things. But this way of borrowing money is most commonly used for paying off an overdraft or debt.

What is a money transfer credit card?

A money transfer credit card is a special type of credit card that you can use to pay cash directly into your current account.

Some money transfer credit cards charge interest, but others come with a 0% interest deal for a set length of time. Be aware, though, that your card provider might still charge a fee for each transfer.

As with all credit cards, once you have more than £0 on your balance, you’ll need to pay off a minimum amount each month. 

Or you might choose to clear the balance each month. If you don’t make at least the minimum repayment, it'll be marked as a missed payment, and you'll likely be charged a late payment fee.

How much money can you transfer?

This depends on your personal agreement with the bank. When they look at how much you can transfer, it will base its decision on your financial situation and credit record.

You’ll be given an overall credit limit and, separately, you’ll also be given an amount you can transfer to your bank account. The amount you can transfer is usually a percentage of the overall credit limit. Here're more about why your credit limit matters

The fee for doing a transfer is usually a percentage of the amount you’re transferring.

For example, if you’re transferring £1,000 and the fee was 3%, you’d pay £30 for the transfer. So your balance would then be £1,030 (if you had nothing else outstanding on the card). It tends to be somewhere between 2% and 4%.

How to choose a money transfer credit card

It’s important to find a good deal when you’re choosing a money transfer credit card. 

They usually give you a set amount of time within which you can repay the money you’ve transferred without paying any interest. But there will be a transfer fee.

The longer the interest-free period, the higher the transfer fee is likely to be. The longest 0% period you can usually find is about 18 months.

It’s in your interests to choose a 0% interest money transfer card. You’ll need to work out how long you’d want to clear the debt incurred when you transfer the money. If you choose a card with a short 0% interest period, you’ll need to pay more each month to get it paid off before the 0% period expires. 

You should try to choose the card with the lowest fee with a 0% period that lasts as long as you’ll need to pay back the amount you’re borrowing. If you’re not sure, it’s best to go for a longer 0% period.

Things to think about before transferring funds from a credit card

Transferring funds from a credit card to your bank account is something to think carefully about. Is it the best option for you? Do you have other options? Will you be able to pay it back? Are you getting the best deal? There’s a lot to consider.

Here are some important things to think about before you take the plunge.

• Fees: Check the fees carefully to see how much you’ll pay to do a transfer. As it’s usually a percentage of the transfer, it will be higher the more you transfer. Read more about how credit card charges work here.

• Interest rates: Check the interest rates. If you’re choosing a 0% interest money-transfer deal, look at how long the 0% period is. Also check what the rates will be after that period as they’re likely to rise a lot.

• Temptation to spend: Will you be more tempted to spend money unnecessarily once it’s transferred into your current account?

• Other options: Calculate if it’s cheaper to transfer funds from your credit card, or to choose another route. For example, another option could be to use your overdraft. Or you could get a loan, if it works out cheaper over time. It’s always best to do your research.

• First transfer timeline: Some money transfer credit cards require you to do a transfer within 60 days. If you don’t, you could lose out on your 0% period.

Are there any alternatives to money transfer cards?

You can take cash out from a credit card but, as mentioned above, this can be a very expensive route.

Alternatively, you could get a loan, or you could use your overdraft. But you might find that transferring money from a credit card to your bank account is a cheaper option than taking out a loan. It is also likely to be cheaper than using your overdraft. It all depends on interest rates and your personal financial situation. 

The good thing about transferring money from a credit card to your bank account is that you won’t have to secure your borrowing against your home when transferring cash from a credit card, which you might do with a loan. So it can be less risky.

How to find a money transfer card

You should be able to find the right money transfer credit card using our comparison table.