If you need to wire funds but don’t have the available cash in your bank account, one option that may be suggested to you is to wire money from your credit card. Wiring money from your credit card is easy and can be used to send money instantly all over the world, but is it a good idea?
Our final say would be that while wiring money from your credit card can certainly be an effective way of sending money rapidly to someone around the world or to borrow a small sum of cash as a cash advance for yourself, it may not always be the best option.
Paying by credit card can have higher fees than sending money via your bank account or debit card, for example, so it is well worth informing yourself on the best option for your needs in terms of cost, transfer time, and the security of the provider you are sending money with. Use our comparison tool to help you find the best option for you first.
Wiring money from your credit card to your own bank account is known as a cash advance. Some people may choose to do this if you are looking to borrow a small sum of cash, to pay off an overdraft, or if you need to make a payment but don’t have the funds immediately available in your account.
Alternatively, you may also choose to wire money from your credit card to someone else’s account when making a payment. This may be an option if you are looking to wire money internationally to family, to make a payment or a deposit, for example, but don’t have the immediate fund available in your bank account. Others may prefer to use a credit card to pay for a money transfer rather than using your bank account.
Before evaluating whether wiring money from your credit card is actually a good idea, let’s first look at the main options you have when making any kind of wire transfer.
Traditionally, wire transfers are processed by banks. This type of transfer is a quick and efficient way to transfer money between banks, although the more rapid nature of a wire transfer does mean there are often more fees involved with bank transfer. Make sure you read our guide if you’d like to know which way is the cheapest to wire money.
In more recent years, another popular way to move money between accounts electronically is to use a money transfer provider. Money transfer providers are known for providing lower fees (in some cases you can even make a free wire transfer), better exchange rates, and faster transfer times (sometimes funds are available within minutes) than traditional banks, which is why we always highly recommend comparing these companies when looking to wire money.
The steps for wiring money from your credit card with a money transfer provider are fairly similar if you were sending money via any other payment method. These are:
Despite the ease and appeal of wiring money from your credit card, there are certainly some considerations you should be aware of before initiating this type of transfer. The major disadvantages include:
Many credit card companies will charge a fee for a cash advance – how much depends on which credit card provider you have. It’s worth bearing in mind that these fees raise the price of whatever you are paying for, so you may want to reconsider sending funds you don’t actually have in your own account.
Additionally, paying for an international transfer with your credit card will often have higher fees than other payment methods such as making a bank transfer or paying by debit card.
It’s essential that you check any interest charges you will incur for wiring money from your credit card. You may be able to overcome these fees if you pay off your credit card debt before your cut-off date at the end of each month, but it’s important to note that some credit card providers do not offer a grace period on interest charges for cash advances.
Sending money from your credit card is a fast way of getting your money to your recipient. While this sounds like a positive, it does mean that most credit card cash advances are irreversible as the money will be deposited in your recipient’s account near instantly.
There are several alternatives to wiring money from your credit card, many with just as fast transfer times and lower fees. Popular alternatives for wiring money include:
This is a common way of moving money electronically from one bank account to another. Bank transfers may have higher wire transfer fees when sending with your bank but are commonly one of the cheapest ways to send money with a money transfer provider.
On the other hand, bank transfers can take longer to be processed (around 3 – 5 working days in some cases) when making an international transfer compared to paying by card.
Another alternative to wiring money from your credit card is to pay with your debit card. The clear advantage to this is that a transfer from your debit card will incur lower fees because you are simply transferring money you already have available in your account.
However, the downside, therefore, is that you need to have these funds available on the day you are making a transfer, which is one of the key reasons someone may consider wiring money from a credit card.
This transfer method often has low fees and instant transfer times, and is appealing because of how accessible it is for people all over the world.
The bottom line is that while wiring money from a credit card is certainly an option, it may not always be a good idea. Wiring money from a credit card can be a quick solution to getting money to your recipient if a payment is urgently needed, but it’s important to make yourself aware of all of the fees you are likely to incur as a result of making this type of transfer.
If a transfer is not urgent, you may want to consider sending your money via an alternative method such as a wire transfer directly from your bank account or perhaps paying with your credit card.
Ultimately, doing your research and being informed about the fees associated with any transfer is the key thing. Our comparison tool is designed to help you do exactly that – simply enter your specific transfer needs and we’ll show you the best transfer providers for your specific needs.
Yasmin is the content writer for MoneyTransfers.com. With an English degree from the University of Nottingham and over 5 years’ experience freelancing in the personal finance niche, Yasmin joined the team with a mission to make international money transfers accessible and easy to understand for all. When she’s not writing, you’ll find Yasmin on her yoga mat or planning her next escape to the mountains.