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Guide to Sending Money With a Credit Card

Guide to Sending Money With a Credit Card
Jason Steele
Jason SteeleUpdated December 23, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Credit cards come with a lot of conveniences, like being able to make cashless payments in person, online, or over the phone. But can you use them to send money to someone’s bank account?Yes, but there are a few caveats to keep in mind. Here’s a look at which tools and platforms allow you to send money with a credit card, what fees you can expect, plus things to consider before you charge a money transfer to your credit card.

Transferring Money From a Credit Card to a Bank Account or Debit Card

Though credit cards are most commonly used to pay for goods and services, it is possible to use a credit card to transfer money to a bank account or debit card. Here’s how you can do it.

Cash Advance

You can use a credit card to transfer cash into a bank account by using the card’s cash advance feature. A cash advance is essentially a loan against the credit limit on your credit card. Two ways to transfer money to your own bank account or debit card:
  • At an ATM You can get cash at the ATM using your credit card and a personal identification number, or PIN (if you don’t have a PIN, you can typically get one by contacting your card issuer). Once you have the cash, you can deposit it into your bank account, either at the ATM or at a branch. You’ll then be able to access it with your debit card.
  • At your bank If you have a credit card with the same bank where you have a bank account, you may be able to have your bank deposit a cash advance directly into your account. 
To transfer money to someone else’s bank account, you can use a convenience check. Offered by many card issuers, these checks look and act like regular checks. The difference is that the money won’t money won’t come out of your checking account. Instead, it will be a cash advance.However you access a cash advance, card issuers typically charge a cash advance fee, which could be a flat fee (often $5 to $12) or a percentage of the advance (usually 3% to 8%). In addition, the issuer will typically start charging interest right away. The annual percentage rate (APR) for a cash advance may also be higher than it is for purchases.Recommenced: How Do Credit Cards Work?

Money Transfer Services

Money transfer services, such as Western Union and MoneyGram, generally allow you to make a wire transfer directly to a bank account using several payment options, including a credit card. You can initiate a transfer either online or at one of their locations, and will need the name, bank account number, and routing number of the recipient’s bank account. Often the transfer takes place in just a few minutes.This convenience comes at a cost, however. The money transfer service will charge a transaction fee. In addition, your card issuer will likely consider this a cash advance, which comes with fees and interest.

Peer-to-Peer Services

Peer-to-peer (P2P) payment apps, such as Venmo, PayPal, or Cash App, let you send money directly to another person’s bank account as long as both you and the recipient are registered with the app. When you make a payment, you can generally choose to send the money using a linked bank account, debit card, or credit card.If you opt for a credit card, the app will typically charge a credit card processing fee, often around 3% of the amount transferred. Your credit card issuer may consider this type of payment a cash advance (which comes with a fee and interest), or it might be considered a purchase. To find out, you’ll need to contact your card issuer first to ask.

Redeem Cashback

When you use a cash back credit card, you typically get a certain percentage of what you spend back. If, for example, your card offers 2% cash back, you would earn $2 back for every $100 you spend. Your rewards will build up in your account, and you may be able to redeem them in several ways – as a statement credit, check, or direct deposit into a linked checking or savings bank account. If you choose direct deposit, this gives you a way to transfer money from your credit card to a bank account at no cost. However, the deposit typically needs to go into your own account. If you want to transfer your cash rewards to someone else, you might need to get it deposited into your account, then transfer it to someone else using a payment app.

Factors to Consider When Sending Money From a Credit Card

Before you use your credit card to send money, here are some factors you may want to keep in mind. 

Fees

With the exception of redeeming cash back rewards, any time you use your credit card to send money to a bank account, you will almost certainly incur fees. The service providing the transfer may charge a credit card processing fee. And, on top of that, your credit card issuer will likely charge a cash advance fee, which may be a fixed amount or a percentage of the amount you are transferring from your credit card account. 

Interest

Both credit card purchases and cash advances are loans that come with interest charges. With purchases, however, you can avoid accruing any interest by paying your statement balance in full and on time. With cash advances, on the other hand, interest typically begins to accrue immediately from the day of withdrawal. In addition, the cash advance APR is often higher than the APR for purchases. Cash advance interest rates generally range from 17.99% to 29.99% APR. 

Credit

Whenever you use your credit card to make a purchase or a cash advance, you are using up some of your available credit. If you use your credit card to send someone (or yourself) a large amount of money, you could end up exhausting your credit limit, which could negatively impact your score. It’s generally recommended to keep your credit utilization ratio (how much of your total available credit you are currently using) under 30%. Recommended: How to Use a Credit Card Responsibly

Pros and Cons of Sending Money With a Credit Card

Pros of Sending Money With a Credit CardCons of Sending Money With a Credit Card
Can be useful in an emergency Getting a cash advance comes with fees
Generally fast and convenientThe APR on a cash advance is typically high and there’s no grace period
Comes with security features like fraud protectionNot all money transfer services accept credit cards as a method of payment
Can be a good way to use your cash back (though you may not be able to send that money directly)Using a large share of your available credit line could negatively impact your credit

Alternatives to Using Credit Cards to Send Money

A credit card can be a convenient way to send money, but also a costly one. Here are some other options to consider.Using your debit card If you link a P2P payment app to your debit card (rather than your credit card), you can typically send someone money for free. Writing a check It’s old school, but it works. If you have access to paper checks, you can simply write someone a check and either give it to them or send it in the mail. Some banks will even allow you to deposit a check into another person’s account using a teller if you have their full name and account number.Sending a money order Though not free, you can purchase money orders at banks and credit unions (as well as some big box stores, post offices, and gas stations) for a small fee. You can use cash or a debit card to buy a money order. The payee can then cash the order at a local bank or credit union, or deposit it into their account. You'll get a receipt, so if the deposit never goes through for some reason, you have proof of the money order.

The Takeaway

If you’re in a pinch, you can transfer money from your credit card to a bank account with a cash advance, a convenience check, payment apps (like Venmo), or money transfer services (such as Western Union). However, it is generally expensive to transfer money from a credit card to a bank account because credit cards are designed to be used for purchases – not as cash loans. There is one free way to transfer money from your credit card to a bank account – by redeeming your cash back rewards.In the market for a new credit card? It can be a good idea to shop around and compare credit card rates, as well as rewards (like cash back). With Lantern by SoFi’s online credit card marketplace, it’s easy to compare multiple card offers matched to your needs and qualifications with just one application.

Frequently Asked Questions

How can I send money online with a credit card?
How long does it take to transfer money from a credit card to a bank account?
How much does it cost to transfer money from a credit card to a bank account?
What is the impact of using my credit card for transfers on my credit?
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Photo credit: iStock/Youngoldman
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About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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