What transferring money via credit card actually means
Transferring money via credit card means moving funds from your credit card account to a bank account, another person's account, or a payment service. This is different from making a purchase — you are withdrawing cash or moving credit as money, not buying something. The most common methods are cash advances at an ATM, balance transfers to another card, and peer-to-peer payment apps that accept credit cards.
Each method works differently and costs different amounts. A cash advance charges an upfront fee (usually 3 to 5 percent of the amount) plus a higher interest rate than regular purchases. A balance transfer moves debt from one card to another and also charges a fee, typically 3 to 5 percent. Peer-to-peer apps may charge a flat fee or a percentage depending on the service and whether you use a credit card or debit card.
Key Takeaways
- Cash advances at an ATM charge an upfront fee of 3 to 5 percent plus interest that starts accruing when ready, with no grace period.
- Balance transfers move your existing credit card debt to a new card and charge a one-time fee, but may offer a low or zero interest rate for a set period.
- Peer-to-peer payment apps like Venmo and PayPal accept credit cards but charge a percentage fee (usually 2 to 3 percent) when you use a credit card instead of a debit card.
- The cost of transferring money via credit card is almost always higher than using a debit card or bank transfer, so use this method only when you have no other option.
Getting a cash advance at an ATM or bank branch
A cash advance is the most straightforward way to turn your credit card into cash. Go to any ATM that displays your card's logo (Visa, Mastercard, American Express, or Discover) or visit a bank branch. Insert your card, select "cash advance" or "withdrawal," enter your PIN, and choose the amount. The ATM will dispense cash when ready.
Know your cash advance limit before you go — it is usually lower than your credit card limit and is set by your card issuer. You can find this limit in your card's terms, on your online account, or by calling the customer service number on the back of your card. The fee hits your account right away, and interest begins accruing the same day with no grace period, even if you pay the balance in full at the end of the month.
Some ATMs charge an additional surcharge on top of your card issuer's fee, especially if you use an out-of-network machine. To avoid this extra cost, use an ATM owned by your card issuer's bank or a network ATM that your issuer participates in. Check your card's website or call customer service to find participating ATMs near you.
Using a balance transfer to move debt between cards
A balance transfer moves an existing credit card balance to a different card, usually one with a lower interest rate or a promotional zero-percent period. Contact the card you want to transfer the balance to and request a balance transfer. Provide the account number of the card you are transferring from, the amount, and confirm the transfer fee (typically 3 to 5 percent of the amount transferred).
The new card issuer will pay off the old card directly. The transferred balance appears on your new card within a few days to two weeks. If the new card offers an introductory zero-percent rate, that rate applies only to the transferred balance, not to new purchases. Read the offer carefully — the promotional period may last three months, six months, or longer, and the regular interest rate kicks in after it ends.
Balance transfers are useful for consolidating debt or moving a balance away from a card with a high interest rate, but only if you can pay down the balance during the promotional period. If you cannot, you will owe interest at the regular rate on whatever remains. Many people make the mistake of transferring a balance and then continuing to use the old card, which defeats the purpose of the transfer.
Sending money through peer-to-peer payment apps
Apps like Venmo, PayPal, Square Cash, and Zelle let you send money to another person's phone number or email address. Most of these apps accept credit cards, but using a credit card instead of a debit card or bank account triggers a fee. Venmo charges 3 percent when you pay with a credit card. PayPal charges 2.2 percent plus 30 cents for credit card transfers. Square Cash charges 1.5 percent for credit card payments.
To send money, open the app, select "send" or "transfer," enter the recipient's phone number or email, type the amount, and confirm. The money reaches the other person within minutes to one business day depending on the app and whether they have verified their account. The fee is deducted from the amount you send, so if you send $100 and the fee is 3 percent, the recipient gets $97.
These apps are meant for small, occasional transfers between people you know — splitting rent, paying back a friend, or sending a gift. They are not designed for moving large sums or for regular business payments. If you need to move money regularly or in large amounts, a bank transfer or wire is cheaper and more reliable.
Comparing the cost of each method
| Method | Fee | Interest Rate | When Interest Starts | Best For |
|---|---|---|---|---|
| Cash Advance | 3–5% upfront | Higher than purchases (often 20%+) | when ready, no grace period | Emergency cash when no other option exists |
| Balance Transfer | 3–5% one-time | 0% for intro period, then regular rate | After promotional period ends | Consolidating debt or lowering interest on existing balance |
| Peer-to-Peer App | 1.5–3% per transfer | None (not a loan) | N/A | Sending money to friends or family |
| Bank Transfer or Wire | $0–$15 depending on bank | None | N/A | Moving money between your own accounts or to another person |
The cheapest option is almost always a bank transfer or wire from your checking account. If you must use a credit card, a peer-to-peer app is cheaper than a cash advance for small amounts, and a balance transfer is the right choice only if you are moving existing debt and can pay it down during the promotional period.
When comparing methods, factor in not just the upfront fee but also how long you will carry the balance. A cash advance at 5 percent fee plus 22 percent interest costs far more than a balance transfer at 3 percent fee plus zero percent for six months, even though the upfront fee is lower. Calculate the total cost before you choose.
When you should not transfer money via credit card
Avoid credit card transfers for everyday money movement. If you are transferring money to pay a bill, cover an expense, or move funds between your own accounts, use your debit card or a bank transfer instead. These methods are free or nearly free and do not trigger interest charges.
Do not use a cash advance to pay off other debts or to fund a purchase you cannot otherwise afford. The interest rate is high, the fee is when ready, and interest starts accruing right away. If you are considering a cash advance because you are short on cash, that is a sign to pause and look for a lower-cost solution — a personal loan from a bank, a payment plan with a creditor, or a temporary increase in income.
Balance transfers can trap you if you do not have a plan to pay down the balance before the promotional rate ends. If you transfer $5,000 at zero percent for six months but only pay $1,000 during that time, you will owe interest on the remaining $4,000 at the regular rate, which can be 15 to 25 percent or higher. Only transfer a balance if you are confident you can pay most or all of it during the promotional window.
Steps to transfer money via credit card safely
For a cash advance: Check your cash advance limit and fee before going to the ATM. Use an ATM at your card issuer's bank or a network ATM to avoid additional surcharges. Withdraw only what you need. Plan to pay it back as soon as possible because interest accrues when ready.
For a balance transfer: Compare offers from at least two cards before explore. Read the fine print on the promotional rate — note the end date and the regular rate that follows. Confirm the transfer fee and make sure the new card's rate is actually lower than your current card. Set up a payment plan to pay down the balance before the promotional period ends.
For a peer-to-peer app: Verify the recipient's phone number or email before sending. Confirm the fee and the amount the recipient will receive. Use the app only for transfers to people you trust. Do not send money to someone you have just met or to pay for something you have not seen in person.
Frequently Asked Questions
Can I use a credit card to transfer money to my own bank account?
Not directly through most banks. Some credit card issuers offer cash advances that you can deposit into a bank account, but this triggers a cash advance fee and interest. Your bank will not let you link a credit card as a funding source for transfers. If you need to move money from a credit card to a bank account, a cash advance is the only credit card method.
What is the difference between a balance transfer and a cash advance?
A balance transfer moves an existing credit card balance to another card and is meant for debt consolidation. A cash advance converts your credit card into cash at an ATM or bank. Both charge fees and interest, but balance transfers may offer a promotional zero-percent rate, while cash advances charge interest when ready. Use a balance transfer to move existing debt; use a cash advance only to get cash when you have no other option.
Do peer-to-peer apps report transfers to credit bureaus?
No. Transfers through apps like Venmo or PayPal are not loans and do not appear on your credit report. They do not build credit history. The only credit card method that affects your credit is a balance transfer, which lowers your available credit and may temporarily lower your credit score.
What happens if I cannot pay back a cash advance?
The unpaid balance and interest remain on your credit card and accrue interest each month. If you do not pay, your card issuer may report the debt to credit bureaus, which damages your credit score. After several months of non-payment, the issuer may close your account or send the debt to a collection agency. Contact your card issuer when ready if you cannot pay — some issuers offer hardship programs or payment plans.
Is there a limit to how much I can transfer via credit card?
Yes. Your cash advance limit is set by your card issuer and is usually 20 to 50 percent of your credit limit. Your balance transfer limit is the available credit on the new card. Peer-to-peer apps often have daily and monthly limits that vary by app and by how long you have had your account. Check your card's terms or call customer service to find your specific limits.