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Running out of money can be tough. When your bank account is almost empty, you may need to get cash quickly. It’s possible to use a credit card to transfer money to a bank account via cash advance or check, but we don’t recommend it.
Cash advances are risky due to high interest rates and expensive one-time fees. Balance transfers can lead to more debt if not managed properly. Before requesting a cash advance or balance transfer check from a card issuer, consider other methods such as B. Using savings or taking out a small personal loan.
How do cash advance and balance transfer checks work?
Cash advances give cardholders access to cash from their revolving credit account. Usually, cash advances are made with a credit card, since you can have a debit card at an ATM. Cash advances usually use a specific PIN, as is the case with debit cards. The amount withdrawn may not exceed the currently available balance on the credit card. The cash advance limit is often much less than the card’s total credit limit. So pay attention to what your cash advance limit is if you decide to go this route.
Balance transfer is sometimes used to transfer the balance from a high-yield credit card to a new credit card that offers the lowest amount of interest. A 0% APR introductory period is common with new credit cards, giving cardholders some relief from interest that builds up on balances. However, cardholders can also request a balance transfer check from the card issuer and cash it in order to get the money faster. Some banks, like Chase and Citi, allow cardholders to transfer funds online to an eligible checking account.
Cash advances and balance transfer checks can be expensive. Card issuers typically charge a fee for each cash advance or fund transfer. The fee can be a small percentage of the transaction or a dollar amount, typically between 3% and 5% of the amount being transferred.
The interest you pay on this cash advance varies by issuer. The APR for cash advances is often higher than the APR for regular purchases or transfers. Unlike purchases, which have a grace period, interest is typically accrued the same day the cash advance is made.
Cash advances and balance transfers typically do not qualify for credit card rewards such as cashback or travel points. They can come in handy in a financial emergency, but consider other options first as they may quickly find themselves in debt.
How to transfer money from credit card to bank account
Use cash advance
Some card issuers allow cardholders to transfer money directly from a cash advance to a checking account. If allowed, cardholders can initiate or request this transaction, typically through the card’s online account.
Cardholders can deposit funds into a cash advance bank account in a number of ways:
- use ATM. Cardholders can use a credit card to withdraw money from ATMs. If you’re not sure what the PIN is, use the number on the back of the card. Cardholders can then deposit cash at a local bank branch or ATM that accepts deposits.
- Visit a bank branch. If you have a bank-issued credit card, visit a local bank branch to withdraw money. Ask the teller to put the money into your checking or savings account.
- Order a check. Some card issuers will send a check for the requested withdrawal amount. Check holders can either deposit the check into a bank account or use it as a personal check to pay for something in person.
Use the balance transfer check
To see if the company offers a balance transfer check, first contact your card issuer online or call the number on the back of the card. Each cardholder must meet the transfer limit or eligibility requirements before being approved for the funds transfer.
Deposit checks can be used to pay for things in-store or cashed at a local bank branch for deposits or withdrawals. If your card issuer is a bank, ask the representative if the funds can be deposited directly into the checking account. This will help avoid extra steps like waiting for the check to be delivered and physically cashing it at the local branch or sending it back to your bank.
Is it a good idea to use a cash advance or balance transfer?
Cash advances should only be used in an emergency when all other reasonable options have been exhausted. Cardholders should first consider applying for an income advance, adding to savings accounts, taking out small personal loans at reasonable rates, or even borrowing money from friends or family.
Cash advances may seem like a quick and easy way to get cash quickly, but the transaction usually has negative consequences in the long run. Interest rates on cash advances are sometimes higher than the APR on credit card purchases. Interest accrues on the day the cash advance is paid. This can quickly lead to massive credit card debt if the cardholder cannot repay the cash advance as soon as possible. The cash advance fee also causes significant additional costs.
The balance transfer also costs a lot, especially if the transfer amount is large. Whatever amount is transferred, it must be paid by the cardholder at the earliest. Interest may accrue on the balance transfer date, carrying the same risk as a cash advance. Even if the initial fee is low, don’t be fooled by the other fine print requesting the transfer of the balance.
As interest rates rise and debt increases, there is a risk that total credit utilization will increase to a rate that can lower a credit score. Experts recommend keeping your credit utilization below 30%.
Cash advance and balance transfer check are two ways to transfer money from credit card to bank account, but should only be used as a last resort. Of the two, a balance transfer check, especially if it has a 0% APR promotional rate, is the better option. Cardholders experiencing financial difficulties should first consider other options such as For example, taking out a small personal loan or asking friends or family to borrow money. Cash advance and balance transfer fees and interest rates make them an expensive option that can leave the cardholder in deep debt.