How to Use Your Credit Card to Transfer Money

Sometimes, you might find yourself in a pinch, needing to send money quickly but lacking the immediate funds in your bank account. Whether it's an urgent payment to a friend, a last-minute bill, or supporting family overseas, using a credit card can be a tempting solution. 

This article explores the various methods Singaporeans can use to send money with a credit card, detailing the pros, cons, and associated fees to help you make informed decisions.

1. Apply for a cash advance

A credit card cash advance essentially allows you to withdraw cash against your credit limit. This can be done by using your credit card at an ATM, much like a debit card, or by obtaining cash from a bank teller. 

Some banks also offer the option to transfer money from credit card to bank account, effectively treating it as a cash advance. In Singapore, major banks such as DBS, OCBC, UOB, and Citibank provide this service.

However, be warned: cash advances come with significant costs. You'll likely face a cash advance fee, potentially an ATM fee, and interest that starts accruing immediately. Moreover, the interest rates for cash advances in Singapore are often higher than regular purchase rates, and your withdrawal limit might be lower than your overall credit limit.

» Read more: How much can you borrow from a loan?

2. Download a peer-to-peer payment app

In Singapore, peer-to-peer (P2P) payment apps like PayNow, PayLah!, GrabPay, and ShopeePay have become incredibly popular for quick money transfers. You can link your credit card to these apps, enabling instant transfers to friends, family, or merchants. Additionally, services like Wise allow you to fund P2P transactions or international transfers using your credit card, though fees may apply.

Here's how you can link your credit card to popular P2P apps for local transactions:

1. Open your preferred P2P app (e.g., PayLah!, PayNow).

2. Navigate to the "Settings" or "Payment Methods" section.

3. Select "Add Credit Card" and enter your card details.

4. Verify your card, and you're ready to go!

These apps make it easy to transfer money from credit card to bank account or to directly send funds to friends, pay for services, or even make donations with just a few taps.

» Read more: Best remittance transfer services in Singapore

3. Set up a wire transfer

For international money transfers, you can use your credit card to fund a wire transfer through banks or specialised transfer services. Banks like OCBC, UOB, and DBS in Singapore offer wire transfer services that can be funded via credit card. Wise also provides a platform on how to transfer money from credit card to bank account internationally, detailing the associated fees on their website.

Be aware that using a credit card for wire transfers can incur significant overseas charges and transaction fees, in addition to potential cash advance fees from your credit card issuer.

» Read more: Best remittance transfer services in Singapore

In Singapore, some credit card issuers offer ways to get a cash loan from your credit limit, providing an alternative to traditional personal loans. These services, such as Cash-on-Instalments, balance transfers, and other options, are available from local banks like OCBC, Citi, UOB, and HSBC. They allow you to borrow a specific amount against your available credit with predetermined interest rates and repayment schedules.

Here's a general overview of how you can access funds through credit card loan options:

1. Log in to your online banking account or the issuer's mobile app.

2. Look for "Credit Card Loan," "Cash-on-Instalments," or a similar option.

3. Select the loan amount and repayment period.

4. Review the interest rate and fees.

5. Confirm your application.

Specific loan programs include OCBC Cash-on-Instalments and Citi Flexi-Loan, each with its own terms and conditions.

» Read more: Before you use a cash advance, read this

5. Leverage your credit card rewards

Credit card rewards points can also be a way to effectively "transfer" value or make payments in Singapore. Local rewards programs such as DBS Points, OCBC Rewards, UOB Rewards, and HSBC Rewards offer various redemption options. These points can be used to offset bill payments, make purchases at participating merchants, or in some cases, facilitate international transfers through the bank's services.

Here's a general outline of how to redeem your credit card points:

1. Log in to your online banking account or the issuer's mobile app.

2. Navigate to the "Rewards" or "Redemption" section.

3. Browse the available redemption options.

4. Select your preferred method and follow the prompts.

» Read more: Best credit cards in Singapore for unlimited cashback