HomeInternational Wire TransfersCredit card wire transfer - Is it worth it?

Credit card wire transfer - Is it worth it?

Looking for credit card wire transfer?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?

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Quick summary: is sending money via your credit card a good idea?

Our opinion 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.

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Why send money from your credit card?

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.

Types of wire transfer

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.

Bank 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.

Money transfer provider

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 and want the best the money transfer services.

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:

  • Choosing the right provider: Use our comparison tool to find the best service based on your specific needs, such as the sum you are sending and the countries you are converting between. If you are set on making a transfer using your credit card, you’ll want to make sure the provider you choose supports this payment method.

  • Linking your credit card to the app: Once you’ve created an account with your chosen transfer provider, you can link your credit card (or whatever payment method you are using) to the app for quick and easy transfers.

  • Provide the information needed to transfer: You’ll need the name, bank account number, and sort code of the bank account you are transferring to. Sometimes you may also need the IBAN and BIC codes of this account, too. Make sure you are certain these details are correct and that you are sending your money to someone you trust.

  • Track your transfer: Once you have initiated your transfer (first checking the associated fees), you can track the progress to ensure your recipient has received your funds.

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Disadvantages of a credit card wire transfer

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:

Potentially expensive fees

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.

High interest charges

If you are looking for a credit card wire transfer, 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.

It can be difficult to reverse the transfer

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.

Alternatives to wiring money from your credit card

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:

Wiring money from your bank account

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.

Use your debit 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.

Mobile wallets

Finally, you could make a transfer using a payment app or eWallet. Providers such as WorldRemit and Azimo have mobile wallets that allow you to store, send, and receive money from your mobile phone.

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.

Summary: is wiring money from a credit card a good idea?

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.

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Article Factchecked by Elliot Laybourne on 20th July 2022. Elliott is a former investment banker with a 20 year career in the city of London. During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making. During this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others.

Yasmin Purnell
Yasmin Purnell
Yasmin Purnell is a Content Writer and Editor for Yasmin has a wealth of experience writing across a range of topics within the personal finance, student, and business niche. Yasmin joined the team with the one main mission to provide accessible financial, career and business information and advice for all.