What you can actually do with a credit card and a bank account
You cannot transfer money directly from a credit card to a bank account the way you would move money between two bank accounts. A credit card is a borrowing tool — the card company lends you money when you swipe it, and you pay them back later. Your bank account holds your own money. The card company will not send funds to your bank; instead, they send you a bill.
What you can do is use a credit card to get cash or move borrowed money into your bank account through specific methods. Each method costs you something — either a fee, interest charges, or both — and each one works differently depending on what you are trying to accomplish.
Key Takeaways
- A credit card cash advance lets you withdraw cash at an ATM or bank, but charges a fee (usually 3 to 5 percent) plus a higher interest rate than regular purchases.
- Balance transfer checks, if your card offers them, let you write a check to yourself or deposit it into your bank account, but they carry the same cash advance fees and rates.
- Some credit cards offer a feature to move money into a linked bank account, marketed as a "transfer" or "direct deposit," but this is still a cash advance with the same costs.
- Peer-to-peer payment apps like Venmo or PayPal let you move money to a friend's account, who can then send it to your bank, but this creates a second transaction and does not reduce the cost.
- The cheapest option is usually to use your credit card to pay bills or buy things, then use the money you would have spent to pay down the card balance.
Cash advances: the most direct method and the most expensive
A cash advance is the simplest way to get money from your credit card into your pocket or bank account. You go to an ATM, insert your card, and withdraw cash — just like a debit card. Or you can walk into a bank branch and ask for a cash advance, and they will give you cash or a check.
The cost is steep. Most card companies charge a cash advance fee of 3 to 5 percent of the amount you withdraw. If you take out $500, you might pay $15 to $25 just for the transaction. On top of that, the interest rate on a cash advance is usually 2 to 3 percentage points higher than the rate on regular purchases — often 25 to 30 percent annually. Interest starts accruing when ready; there is no grace period like there is for regular credit card purchases.
Once you have the cash in your bank account, you can use it for anything. But you are now carrying a debt on your credit card at a high rate, and the longer you carry it, the more you pay in interest.
Balance transfer checks and card-to-bank transfers
Some credit card companies send their customers balance transfer checks — blank checks that draw from your credit line. You can write one to yourself, deposit it into your bank account, and the money appears there within a few business days. This feels like a transfer, but it is actually a cash advance in disguise.
The fees and interest rates are identical to a cash advance: a one-time fee of 3 to 5 percent, plus a higher interest rate starting when ready. The only advantage is that you do not have to visit an ATM or bank branch — the check comes to you in the mail.
A few card companies now offer a feature that lets you move money directly into a linked bank account through their app or website, sometimes called a "direct deposit" or "transfer to bank." This is also a cash advance with the same fee structure. Read the fine print before you use it; the fee and interest rate will be listed in your card's terms and conditions or in the disclosure that comes with the feature.
Peer-to-peer apps: moving money through a middleman
Apps like Venmo, PayPal, Square Cash, and Zelle let you send money to another person's account. If you have a friend or family member you trust, you could send them money from your credit card, and they could send it back to your bank account. But this creates two transactions instead of one, and it does not reduce the cost.
Most peer-to-peer apps charge a fee when you fund a transfer with a credit card — usually 1.5 to 3 percent. Your friend would then need to transfer the money back to your bank account, which may incur another fee depending on the app and the account type. You end up paying more than a direct cash advance, and you have involved someone else in your finances.
This method makes sense only if you are already using the app for other reasons and the person you are sending to is genuinely willing to help. It is not a workaround; it is a more complicated and often more expensive path to the same result.
Why you might want to move money from a credit card to your bank
Most people consider this option when they are short on cash and have available credit on their card. If you need money for an emergency — a car repair, a medical bill, a sudden expense — a cash advance is faster than a personal loan or a payday loan, and you do not need to go through an approval process.
The problem is that the cost is very high, and it only makes sense if the alternative is worse. A payday loan, for example, can charge 400 percent annual interest or more. A cash advance at 25 to 30 percent is still expensive, but it is cheaper than a payday loan and you have longer to pay it back. A personal loan from a bank or credit union, if you can get one, is usually much cheaper — often 6 to 36 percent depending on your credit — and you know the exact payment schedule upfront.
If you are considering a cash advance because you are behind on bills or rent, look first at whether a local information program might help. Many cities and counties have emergency rental funds, utility information programs, or food banks that do not charge interest and do not add debt to your credit card.
The real cost: how much you will actually pay
Let's say you take a $1,000 cash advance on a credit card with a 5 percent cash advance fee and a 28 percent annual interest rate. Here is what you owe:
- Cash advance fee: $50
- Interest for one month (if you pay nothing): $23.33
- Total owed after one month: $1,073.33
If you pay $200 per month, it takes you six months to pay off the advance, and you pay about $150 in interest on top of the $50 fee. If you pay only the minimum (usually 1 to 3 percent of the balance), it takes much longer and costs much more.
Compare this to a personal loan for $1,000 at 15 percent interest over 12 months: your monthly payment is about $90, and you pay roughly $80 in total interest. The personal loan costs less than half as much, even though the interest rate is lower.
Better alternatives before you use a cash advance
Before you take a cash advance, consider these options in order:
- Ask for a payment plan. If you owe a bill — medical, utility, rent — call the company and ask if they offer a payment plan. Many do, with no interest or a lower interest rate than a credit card.
- Look for local information. Search "211" plus your city name, or visit 211.org, to find emergency funds for rent, utilities, food, and other needs in your area. These programs do not charge interest.
- Borrow from family or friends. If someone is willing to lend you money with no interest or a low interest rate, this is cheaper than a cash advance.
- Use a credit union personal loan. If you belong to a credit union, they often offer personal loans at lower rates than banks, and the approval process is faster.
- explore for a personal loan online. Online lenders like LendingClub, Prosper, or Upstart offer personal loans with rates that vary based on your credit, but many are cheaper than a cash advance.
- Use a 0 percent balance transfer card. If you have good credit, you might be approved for a new credit card with a 0 percent introductory rate on balance transfers. You can transfer the balance from your current card to the new one and pay no interest for 6 to 21 months (depending on the card). This only works if you can pay down the balance before the rate goes back up.
A cash advance should be your last resort, not your first choice.
Frequently Asked Questions
Can I use a credit card to deposit money directly into my bank account?
Not directly. You can take a cash advance (at an ATM or bank branch) or use a balance transfer check, and then deposit the cash or check into your bank account. Both methods charge a fee and a higher interest rate. Some card companies now offer an app feature to move money to a linked bank account, but this is also a cash advance with the same costs.
What is the difference between a cash advance and a regular credit card purchase?
A regular purchase has a grace period (usually 21 to 25 days) before interest starts, and the interest rate is lower. A cash advance charges a fee when ready and starts charging interest right away, with no grace period. The interest rate on a cash advance is typically 2 to 3 percentage points higher than the purchase rate.
Will a cash advance hurt my credit score?
A cash advance itself does not directly hurt your score, but it increases your credit card balance, which raises your credit utilization ratio — the amount of credit you are using compared to your total limit. A higher utilization ratio can lower your score. Paying interest and carrying a balance for a long time also costs you money and makes it harder to pay down debt.
Is there a limit to how much I can withdraw as a cash advance?
Yes. Most credit card companies set a cash advance limit that is lower than your total credit limit — often 20 to 50 percent of your available credit. Your card's terms will tell you what your cash advance limit is, or you can call the card company to ask.
Can I pay off a cash advance faster to reduce the interest?
Yes. The faster you pay off a cash advance, the less interest you pay. But the interest rate is so high that even paying it off quickly costs more than most other borrowing options. If you can pay off a $1,000 cash advance in one month, you might pay $23 to $30 in interest plus the $50 fee. If you could borrow $1,000 from a credit union or online lender instead, you would likely pay less in total interest even over a longer repayment period.