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How to transfer money from a credit card to a bank account
Find out how to transfer money from a credit card to your bank account, and what fees you might pay.
It is possible to use your credit card to transfer money to your bank account, but doing this may incur high fees and interest. We’ve done the research for you so you know what fees and charges you should check out first before you go ahead. If you need funds fast, consider the alternatives we’ve listed below first.
Ways to transfer funds from a credit card to a bank account
There are a couple of methods you can use to transfer funds from a credit card to a bank account.
1. Withdraw cash from an ATM
Head to your bank’s ATM and use your credit card to withdraw the money you need as a cash advance. You can then deposit the money into your bank account through an ATM that takes cash deposits or via a bank teller.
Banks usually have a set cash advance limit of around $1,000 to $2,000 per day, per card.
Fees to watch out for when withdrawing cash from an ATM
Before you withdraw cash from an ATM to deposit into a bank account, check the following fees and interest rates that your bank charges for this service:
- Credit card cash advance fees for ATMs and tellers: With some card providers, like Westpac, it’s free to use their ATM for a cash advance but others, like BNZ, charge $1 to use their own and $2 to use another banks’ ATM. Currently banks charge up to $3 to use a teller to withdraw or deposit funds.
- Cash advance interest rate: When you withdraw cash from an ATM using your credit card the transaction starts accruing interest from that date. Banks tend to charge a higher interest rate for cash advance withdrawals than they do for store purchases but it does vary between banks and the credit card you use.
2. Transfer money from credit card to a bank account with Internet banking
If your credit card and bank account are with the same bank, you should be able to transfer money from your credit card to your bank account using internet banking.
Fees to watch out for when withdrawing cash from an ATM
Bear in mind that a cash transfer from your credit card to your bank account through Internet banking is still a cash advance, so you may be charged a fee, regardless of whether your credit card account is in debit or credit.
Also check what your bank charges for its cash advance APR. This varies between banks and between cards. For example, the BNZ Lite Visa charges 12.9% APR for purchases and 22.95% APR for a cash advance, while the BNZ Advantage Visa Platinum charges 18.95% APR both for purchases and a cash advance.
What to think about before transferring funds from a credit card
Make sure you consider these factors and potential costs before you go ahead with a transfer from your credit card to a bank account.
- Cash advance fee.If the transfer is considered a cash advance transaction (and it usually will be), then some banks will charge a fee.
- Cash advance interest rate.In most cases, your transfer will be charged interest at the cash advance rate. This rate is usually higher than the interest rate charged for regular purchases and can quickly add up.
- No interest-free days.Your transfer won’t be eligible for interest-free days, which means you’ll be charged interest straight away.
- International transfers.There could be further restrictions if you want to transfer funds from your credit card to an account overseas. But even if the transfer is allowed, you’ll typically pay aninternational transaction feeon top of the other fees and charges.
Other funding options
Here are some further options that don’t involve credit cards if you need funds in a hurry:
- Personal loan. This may be one of your best options. If you have decent credit, you may get a better interest rate than your cash advance rate. You could also get funds in your bank account within a business day. Compare personal loans now.
- Borrow from friends or family. You may find someone willing to help you but be sure to put the terms of the agreement in writing so both of you are on the same page.
- Work and Income. You may be able to get a one-off payment for accommodation and living expenses, even if you’re working or receiving a benefit; see what they can help with. Contact Work and Income to talk about your situation on 0800 559 009.
- Interest free loans. Good Shepherd New Zealand offers interest free loans for low income earners to purchase essential items. There are no fees or interest charges.
- Payday loans. These are short term loans that you repay in installments or in full when you receive your weekly or monthly pay. Payday loans are quick, typically funds are in your account in 24 hours, but they have much higher interest rates than credit cards, so should only be a last resort if you know you can definitely pay back the money in full. Check the fees, charges and loan terms carefully before applying, and consider other alternatives first if possible.
You can transfer money from a credit card to a bank account — but it might cost you more in transaction fees and a higher interest rate depending on who you bank with and the credit card you use. If you have time, consider the alternatives to a cash advance. You’ll find many reputable services that can help you if you’re in a financial pinch.
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