What you need to know about credit card money transfers
A credit card cash advance or balance transfer are the two ways to move money from a credit card into your bank account or to another card. A cash advance lets you withdraw money as if the card were a debit card — you get cash or a bank deposit, but you pay interest when ready and often a fee upfront. A balance transfer moves debt from one card to another, usually to a card with a lower interest rate for an introductory period. Neither is the same as a regular purchase, and both cost more than you might expect.
The choice between them depends on what you actually need the money for. If you need cash in your account to pay a bill or cover an expense, a cash advance is the direct route. If you already owe money on another credit card and want to move that debt to a card with better terms, a balance transfer makes sense. If you are thinking about either one because you need money urgently, pause and read the costs section below — the fees and interest rates often make these options expensive compared to other borrowing methods.
Key Takeaways
- Cash advances charge interest from day one with no grace period, plus an upfront fee that is usually 3 to 5 percent of the amount you withdraw.
- Balance transfers move existing credit card debt to a new card, often with a lower interest rate for 6 to 21 months, but also charge an upfront fee of 3 to 5 percent.
- You can get a cash advance at an ATM, bank teller, or through a convenience check, but each method has different fees and limits.
- The interest rate on a cash advance is typically higher than your card's regular purchase rate and starts accruing when ready.
- Balance transfers work best if you have existing credit card debt and can pay it down during the promotional period before the regular rate kicks in.
How a cash advance works and what it costs
A cash advance is a short-term loan against your credit card's available balance. You withdraw money, and the card issuer treats it as a loan you owe when ready. Unlike a purchase, there is no grace period — interest starts the day you withdraw the money.
The cost has two parts: an upfront fee and ongoing interest. The upfront fee is usually 3 to 5 percent of the amount you withdraw, charged to your account right away. So if you withdraw $500 and the fee is 4 percent, you owe $520 before you even leave the ATM. The interest rate on cash advances is typically 2 to 3 percentage points higher than your regular purchase rate. If your purchase rate is 18 percent, your cash advance rate might be 21 percent. That interest compounds daily until you pay the balance off.
You can get a cash advance three ways: at an ATM using your PIN, at a bank teller's window with your card and ID, or through a convenience check that comes with your card. ATM withdrawals often have the highest fees and the lowest daily limit — sometimes $300 to $500. Bank teller withdrawals may have lower fees but require you to visit in person. Convenience checks work like regular checks but draw from your credit line instead of a bank account.
How a balance transfer works and when it makes sense
A balance transfer moves debt you already owe on one credit card to a different card, usually one with a lower interest rate for a set period. The new card issuer pays off your old card's balance, and you now owe the new card instead. This only works if you already carry a balance on another card — you cannot use a balance transfer to get cash into your bank account.
The upfront cost is a balance transfer fee, usually 3 to 5 percent of the amount transferred. If you transfer $2,000, you might pay $60 to $100 in fees. The benefit is the promotional interest rate, which may be 0 percent for 6 to 21 months depending on the card and your credit. After the promotional period ends, the regular interest rate applies to any remaining balance.
A balance transfer makes financial sense only if you can pay down the debt during the promotional period. If you transfer $2,000 at 0 percent for 12 months, you need to pay roughly $167 per month to clear it before the regular rate kicks in. If you cannot commit to that payment schedule, the balance transfer fee becomes an expensive way to delay the problem. Compare the promotional rate and length to what you would pay in interest on your current card — sometimes the math does not work in your favor.
The difference between cash advances and balance transfers
| Feature | Cash Advance | Balance Transfer |
|---|---|---|
| What it does | Gives you cash or a bank deposit | Moves debt from one card to another |
| Upfront fee | 3 to 5 percent | 3 to 5 percent |
| Interest starts | Day one, no grace period | After promotional period ends |
| Promotional rate | None | Often 0 percent for 6 to 21 months |
| Best for | Getting cash when you need it | Paying down existing credit card debt |
Why these options are usually expensive compared to alternatives
Before you take a cash advance or do a balance transfer, compare the total cost to other ways of borrowing. A cash advance with a 4 percent fee plus 21 percent interest costs you money when ready and keeps costing you every day the balance sits unpaid. A personal loan from a bank or credit union often has a lower interest rate, no daily interest accrual, and a fixed repayment schedule. A line of credit from your bank may also be cheaper.
If you need cash for an emergency, ask yourself whether you can cover it another way first: a payment plan with the creditor, a small personal loan, or a short-term loan from family. If you already carry credit card debt and are considering a balance transfer, make sure you have a concrete plan to pay it down during the promotional period. Moving debt without a payoff plan just spreads the problem across multiple cards.
The exception is when a balance transfer genuinely saves you money. If you owe $3,000 at 22 percent interest and can transfer it to a 0 percent card for 18 months, the math may work — but only if you commit to paying it off before the promotional rate ends. Use a balance transfer calculator to compare your current interest cost to the transfer fee plus what you would owe after the promotional period.
Limits and restrictions on credit card money transfers
Your credit card issuer sets a limit on how much you can withdraw as a cash advance, separate from your regular credit limit. This cash advance limit is often lower — sometimes 20 to 50 percent of your total credit limit. So if your card has a $5,000 limit, your cash advance limit might be $1,000. You can find your cash advance limit in your cardholder agreement or by calling the number on the back of your card.
Balance transfers also have limits. You can only transfer up to your available credit on the new card, and the issuer may set a separate balance transfer limit. Some cards do not allow balance transfers at all, or they limit transfers to balances from other issuers — you cannot transfer a balance within the same company.
Both cash advances and balance transfers count against your credit utilization ratio, which affects your credit score. If you have a $5,000 limit and take a $2,000 cash advance, your utilization jumps to 40 percent. High utilization can lower your score temporarily, even if you pay the balance off quickly.
Steps to take a cash advance or balance transfer
For a cash advance: Call the number on the back of your card to confirm your cash advance limit and the fee percentage. Then visit an ATM, bank branch, or use a convenience check. At an ATM, insert your card, enter your PIN, select "cash advance" or "withdrawal," and choose your amount. The fee is added to your balance when ready. At a bank branch, bring your card and ID, tell the teller you want a cash advance, and they will process it. With a convenience check, write the check to yourself or a payee, deposit it, and the amount is added to your card balance.
For a balance transfer: Find a card that offers a promotional balance transfer rate and meets your needs. Read the terms carefully — note the promotional rate, how long it lasts, and the transfer fee percentage. explore for the card if you do not already have it. Once approved, contact the new card issuer and request a balance transfer. Provide the account number of the card you want to transfer from, the amount, and the old card issuer's contact information. The new issuer will handle the transfer, which usually takes 5 to 14 business days. The transfer fee is added to your new card balance.
Frequently Asked Questions
Can I use a cash advance to pay off another credit card?
Yes, you can take a cash advance and deposit it into your bank account, then use that money to pay another card. However, this is usually more expensive than a balance transfer because the cash advance charges interest when ready and has an upfront fee. A balance transfer is the better choice if both cards allow it, because you get a promotional interest rate period.
What happens if I cannot pay back a cash advance?
The unpaid balance stays on your credit card and continues to accrue interest at your cash advance rate. If you do not pay, the debt can go to collections and damage your credit score. Contact your card issuer if you are struggling to pay — some offer hardship programs or payment plans, though these vary by issuer.
Does a balance transfer hurt my credit score?
A balance transfer can temporarily lower your score because it increases your credit utilization and generates a hard inquiry when you explore for the new card. However, if you pay down the transferred balance during the promotional period, your score usually recovers within a few months. Carrying the balance after the promotional rate ends and paying only minimums will hurt your score more.
Can I do a balance transfer between cards from the same bank?
Most banks do not allow balance transfers between their own cards. You typically have to transfer to a card from a different issuer. Check your card's terms or call the issuer to confirm whether internal transfers are allowed.
What is the difference between a cash advance and a payday loan?
Both are short-term loans, but a payday loan is usually smaller, has a much shorter repayment period (often two weeks), and charges very high interest rates and fees. A cash advance spreads the repayment over your credit card's billing cycle and has lower fees, but interest still accrues daily. For most people, a cash advance is cheaper than a payday loan, though neither is ideal if you have other borrowing options.