Using your credit card to transfer funds into your current account can be a useful way of paying off short-term debt, such as a small overdraft or an unexpected expense.
But remember – using a credit card to raise extra funds means taking on more debt, so you should think carefully before doing this.
Like any financial decision, you should consider whether transferring money from a credit card is right for you.
Here are some factors to think about.
Transferring money from a credit card to a bank account comes with fees. Your bank will typically charge a small percentage of the amount you’re transferring.
Transfer fees are usually between 2.99% and 5%. If you’re transferring large amounts or making regular transfers, the fees can soon add up.
Unless you have a 0% interest period, you’ll have to pay interest on top of your monthly repayments. This adds to the cost.
The minimum amount you can transfer into your account is £100. This can make credit card to bank account transfers unsuitable for smaller purchases.
You won’t be able to transfer money into a foreign account or into someone else’s current account. You can only transfer money into your own account.
Before you transfer money from a credit card, make sure you stay under your credit limit and can still afford your monthly payments. This will help you avoid additional credit card charges.
Transferring money from your credit card to your bank account won’t appear on your credit report. But certain behaviours can negatively affect your credit score.
If you borrow more than you can afford and start missing credit card payments, or if you exceed your credit card limit, it can negatively affect your credit score.
Taking on more debt to pay off an overdraft, for example, can also indicate to lenders that you’re struggling financially. This could affect your ability to borrow money in the future.
Explore: How to get out of your overdraft
Suppose your car breaks down and leaves you with a bill of £300 and your garage doesn’t accept credit cards. You decide to pay by transferring money from your credit card.
Let’s say you have a credit card with a current balance of £0 (you don’t owe anything at the moment). The card has 0% interest for 17 months, a 2.99% transfer fee and a £1,000 credit limit.
Here’s how the transfer works:
If you don’t have a 0% interest credit card, you’ll be charged interest on the money you owe, unless you pay off the balance in full each month. This makes the total cost of borrowing higher.
Interest charges and monthly repayments are important parts of how credit cards work.
If you’re unsure whether you’ll be charged interest, check your credit card agreement before transferring.
Once your credit card provider approves the transfer, the money should arrive in your current account by the next working day.
You should allow up to 3 days for the transfer. If the money doesn’t arrive after 3 days, contact your credit card provider.
