You probably already know that it is possible to transfer the balance on an existing credit card to a new credit card and get a lower interest rate. But not so many people know that it is also possible to transfer from a credit card’s available credit to a bank account.
Interested to know how it works? Read on for more.
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In this guide
How much can be transferred?
The amount you can transfer depends on your available credit balance.
For example, if you have a $4,000 credit limit with $3,000 available credit, you could transfer $3,000 to a bank account. Although it is an expensive option, it does give you funds fast.
How long does it take?
It usually takes two to three business days before appearing as a credit in the bank account of a third party. Public holidays and weekend days add to the delay.
How much does it cost?
Transferring funds from a credit card to a bank account will be processed as a cash advance.
A one-off cash advance fee — typically a percentage of the transferred amount — will be applied immediately. The cash advance interest rate will also come into effect immediately.
For example, if you request a $3,000 transfer and the cash advance fee is 2.5%, the fee alone will come to $75.
The interest rate applied to cash advances on a credit card is currently around 20% p.a. That equates to 1.67% per month.
Additional fees may be applied for transfers to an overseas bank account.
How to transfer funds from a credit card to a bank
The actual mechanics of requesting the transfer are easy.
- Log in in to your mobile or online banking for the credit card.
- Find the page for transfers.
- Complete the transfer request form, specifying your credit card account as the source of the funds.
- Details you will need include your friend’s name; bank account number; and BSB.
You can learn more about sending money to someone else in this Finty guide.
There are several alternative options that allow you to raise cash quickly (at a cost).
- Withdraw cash from your credit card at an ATM and deposit it into a bank account. This will attract all the same fees, but may be faster.
- Use a pay on demand service. Beforepay and MyPayNow give employees a way to receive their wages before their next scheduled payday. Employees effectively borrow a proportion of the money they have earned so far in the current pay period. How much you can borrow varies between services, ranging from 25 - 50%. Beforepay and MyPayNow both charge a one-off flat fee of 5%, but there is no interest.
Can I transfer funds from my credit card to someone else's bank account?
Yes. It is possible to transfer funds from your credit card to someone else's bank account.
Can I transfer funds from my credit card to my debit card?
You can't transfer funds from your credit card to your debit card. However, you can transfer funds to your bank account, which is linked to your debt card.
Can I transfer funds from my credit card to an overseas bank account?
Yes. It is possible to transfer funds from your credit card to an overseas bank account. However, there may be an additional fee on top of the standard cash advance fee and interest.