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Sometimes people need cash for a last-minute or unexpected expense – after all, things happen. You might be wondering if you can withdraw cash from your credit card to cover the cost, especially if the amount is only a couple hundred dollars. It is possible to transfer money from your credit card to your bank account through something called a cash advance transaction. While cash advances are not the most ideal option when you need quick cash, sometimes they are the best or only option. If you’re unsure of what a cash advance is, or simply want to learn more, continue reading below.

How Do I Transfer Money From My Credit Card To My Bank Account? 

Fortunately, your options are not limited when it comes to transferring money from your credit card to your bank account. You can complete the transaction through a teller or ATM, use a convenience cheque, or through online banking. Let’s explore how all of these options work in depth below. 

Use A Teller Or ATM

When you bring your debit card to a teller or ATM, you can withdraw cash. The same is true when you use your credit card. You can either keep the cash or deposit it into your bank account once cash has been withdrawn. Keep in mind that not all ATMs allow cash deposits, but tellers do. 

Credit Card Convenience Cheque

Sometimes credit card providers issue complimentary credit card convenience cheques. When you use one of these cheques, it is as if you tapped, swiped, or inserted your credit card. You can use the cheque to deposit funds into your bank account or withdraw cash. Depending on the credit card provider, a cashed credit card convenience cheque could be treated as a cash advance. Be sure to read the fine print to fully understand how the convenience cheque will be treated.

Make A Transfer Online

So long as the credit card and the bank account you’d like to deposit the funds to are with the same bank, you can perform an online transfer. It’s as simple as logging into your online bank account and transferring the funds from your credit card to your bank account.

Do you know what the true cost of borrowing is? Check out this infographic to learn. 

Are There Fees?

Yes, the problem with cash advances on credit cards is that there are hefty fees associated with the process of transferring money from your credit card to your bank account. First, there will be a cash advance fee, which tends to be around $2.50 to $5 in Canada. 

Second, interest will accrue on the cash advance amount immediately. Normal transactions on your credit card typically don’t accrue interest until the grace period is up, this is not true for cash advances. There also tends to be a higher interest rate applicable to cash advances when compared to the credit card’s normal interest rate. Usually, the cash advance interest rate is 22.99% which is higher than the regular 19.99% credit card rate, but this varies from credit card to credit card. 

Will Transferring Money From My Credit Card To My Bank Account Hurt My Credit?

Thankfully, there is no direct impact on your credit score when you transfer money from your credit card to your bank account. However, there can be an indirect impact if you’re not careful. A cash advance transaction can impact your credit score if you exceed your credit limit or your credit utilization ratio becomes too high. If you keep an eye on your credit card balance and avoid maxing out all of your credit cards, the cash advance won’t hurt your credit.

When Should You Transfer Money From Your Credit Card To Your Bank Account?

Whenever an individual is strapped for cash and must pay an expense out of their bank account or by cash, they should use a money transfer from their credit card to their bank account. Obviously, if the expense can be put on a credit card then a cash advance would be redundant. Some examples of this scenario include: 

  • Payment of a utility bill
  • Home repair
  • Medical expense
  • Car repair

Keep in mind that cash advances are typically limited to a few hundred dollars. In addition, you need to have enough space on your credit card to support the full cash advance you want to complete. If you require more cash to pay the expense at hand, you might need to explore other options. 

Alternatives To Get The Cash You Need

Transferring money from your credit card to your bank account is not ideal due to the hefty transaction fees and inconvenience. To avoid using cash advances, there are several alternatives listed below. 

Build An Emergency Fund

Having an emergency fund can reduce your dependency on financing when an unexpected expense pops up or you’re tight on cash. As little as $500 in savings can go a long way.

Personal Loan

A personal loan can be an excellent financing alternative. The APR on a personal loan is typically lower than the interest rate on cash advances, you can get the funds into your bank account within one business day and have the opportunity to obtain more cash. You’ll get more than you bargained for with a personal loan.

Borrow From a Friend or Family Member

If the expense isn’t an exorbitant amount of money, asking a friend or family to help you out until you can repay them is an excellent option. If they’re a good friend or family member, they won’t charge you interest.

Overdraft Your Chequing Account

Banks offer overdraft on chequing accounts which allows you to withdraw more than what’s available in your account. There is typically a small monthly fee administered by your bank to allow you to use an overdraft. In addition, there may also be a limit as to how much you can dip below $0 in your account. 

To Advance Or Not To Advance?

Cash advances have their uses, especially if you’re in a pinch for cash and don’t have any other options available to you. Although, the convenience of a cash advance comes with a fee that should be avoided if possible. To make the best decision, consider your bank’s fees and the cost of other alternatives. 

Veronica Ott avatar on Loans Canada
Veronica Ott

Veronica is a writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veronica is not writing, she enjoys film, reading, travelling, going to the gym, and listening to music.

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