If you are looking to get your hands on some fast money due to a financial problem that blindsided you on your rest day or any other day of the week for that matter, there are tons of options available for you to transfer money to your bank account.
One of them is to transfer money from a credit card to your bank account, among personal loan, other forms of cash advances, and other types of bank loans. But what if the easiest way is to somehow transfer money from your credit card?
Well, yes, it is possible to transfer money from a credit card to your bank account through cash advance, however, transferring money from your credit card to your ready account might cause future inconveniences and other hassles that can be avoided if you use other modes of getting cash.
Ways To Transfer
As we have mentioned above, to transfer cash from your credit card, as convenient as it is, it may inconvenience you in the future due to its high interest rates. These types of interest rates from your card start accumulating with no grace period once you take the money from your credit card to your bank account.
Do not worry though, we will also list the downsides further below, but first:
Below are some things that we have listed to provide you with different ways to transfer money from your credit card to your bank account.
1. Direct Transfer
This method may be available to your current bank or financial institution. It directly deposits money from your credit card to your bank account. Some financial institutions even offer an online direct transfer service.
If your credit card is protected by a personal identification number or PIN, chances are you can withdraw your cash advance from your bank’s Automated Teller Machine or ATM. Most credit bureaus nowadays allow money or cash to be withdrawn directly from your credit card.
3. In-person Or Physical Banking
Banking the traditional way. You can directly ask your creditor, bank, or financial institutions to any of its branches when taking a cash advance from your credit cards. However it defeats the purpose if the advance you are trying to get is due to convenience and ease.
Also, banking in person gives you a chance to ask your chosen financial institution to provide you with the information for your banking needs in great detail. Do not forget to ask about the interest rate!
4. Convenience Check
These checks work the same as your normal checks where you can input the amount of money you need. The only difference is that these checks are sent by your credit cards provider and the money comes directly from your line of credit rather than your savings and/or checking accounts.
5. Money-transfer Services: Western Union, MoneyGram, etc
Money transfer services such as Western Union and MoneyGram can be used to transfer cash to your account or for any services that these companies offer.
However, any use of your credit card for the purpose of a cash advance would mean extra fees such as a cash advance fee and the associated credit interest rate will immediately apply with no prior grace period.
6. Payment Apps: Venmo, PayPal, Amazon Pay, etc
Payment apps like Venmo, PayPal, Amazon pay among others are popular mobile payment service providers in the US. Apart from using them to pay for shopping and sending & receiving money, you can also use these mobile payment service providers to get a cash advance from your credit cards.
Some of these apps may not charge you on top of their standard charges for processing fees like PayPal, but be warned as your credit line provider maybe the one to apply certain charges especially for credit card cash advances.
Like we have mentioned in the beginning, there are certain downsides to using a cash advance from your credit cards.
In this part, we have listed the cons of using your cash advance option as they might hurt your monthly finances or worse, even your credit score.
1. Cash Advance Fees
The usual cash advance fees set by most credit card companies is 5% for each cash advance. Now if you are planning to take a huge amount of cash advance, 5% maybe too big of a fee especially if you are taking a cash advance due to a financial issue.
2. High Interest Charges
If the 5% fee does not hold you back, maybe the interest rate for cash advances will. The national average for cash advance interest rates is 26.8%. That is way too high if you are planning to get a cash advance because of a financial bind.
3. Risks Of Damaging Your Credit Score
Did you know that credit utilization constitutes 30% of your FICO credit score? Credit utilization the part in your credit report where it tells the credit bureaus how well you utilize your lines of credit.
With a credit card advance, the 26% interest rate and the 5% fee may be a huge blunder to your monthly bills payment especially if you won’t be able to pay-up on time.
You can calculate your credit utilization by dividing your current balance with your credit limit and multiplying it by 100.
4. Irreversible Transfer
Credit card cash advances are like money-transfer services. They are both irreversible transfers very much unlike most of your credit purchases where you can demand a refund on the dot.
Credit Card Transfer Alternatives
Seeing the cons of credit advances money transfers from your credit cards may have made you step back, do not worry just yet, we have listed alternative money transfers:
1. Wire From Your Bank Account
If you are confident about the recipient of your payment, you can always wire from the account in your chosen financial institution.
2. Simply Pay With A Credit Card
Utilize your credit card. Not only will you be saving yourself from a world full of hassle but you will also be utilizing your credit card, this in turn will help you boost your credit score up a couple of notch in the coming months.
But never max out your credit card, as that may not hurt your credit score in the long run.
3. Cashier’s Check
These types of checks are a lot safer since they are guaranteed by banks and signed by the cashier of the receiving store or company. The financial institution will be the one responsible for paying the amount rather than the purchaser.
There are different types of loans the most financial institutions offer catering to your each and every need. These loans, especially personal loans often have low to no interest rate, so if you are looking to get a lump sum, might as well get a personal loan.
5. Convenience Checks Or Balance Transfer Offers
Most financial institutions offer special convenience checks or balance transfers which saves you some money. You can write a check to yourself without the need to provide information on where you are going to spend the money. You can also get a lower interest rate.
6. Transfer-free Payment Apps
Free payment apps like Cash App, Square Cash, and Zelle let users move money directly without the hassle of writing checks or even withdrawing from an ATM. They also directly deposit the money to the recipient’s account.
The usual speed to transfer is one to five days.
7. Pay With A Debit Card
In most cases, especially online, those merchants that ask for your credit card also accept debit cards. So do not get frustrated whenever you see credit card info spaces in your favorite shopping websites, especially when you are trying to not max out your cards.
8. Send Funds From Checking Account
Well, if all else fails, send funds through your checking account. Most financial institutions charge minimal fee for money movements regarding your accounts. Don’t overthink it too much.
9. Save Up
If this expense is going to put you through a financial bind or even a financial budget reroll for your monthly finances, it may not be worth it. Think it through before acquiring more debt. Not spending is the best way to save money, after all.
We hope this article has helped you figure out ways on whether to get that advance on your credit card or not, despite everything listed here, it is all up to you. It is your money anyways. Just keep in mind the pros and cons and that your credit score is a huge factor in every financial move you are about to make.