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What is a Credit Card Wire Transfer?

Last Updated: September 25, 2023
4 min read

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Key points about: credit card wire transfers

  1. Wire transfers are usually possible with a credit card, but they can be pricey to initiate.

  2. Cash advance and wire transfer fees are usually based off set dollar amounts or percentages based off the total transaction amount.

  3. If your intent is on saving money, credit card wire transfers should only be used as a last result.

If you need to send money fast, one option you may have is a credit card wire transfer. But before you go ahead and agree to one, you should understand what wire transfers are, how they work, and how much it may cost you to do a credit card wire transfer.
 
Let’s dive in and go over what you may need to know about wire transfers to help you make the best financial decision for your needs.

What is a wire transfer?

A wire transfer is the process of moving money electronically from one financial institution to another. If both accounts are in the U.S., it’s a domestic wire transfer. If one is overseas, it’s an international wire transfer. Wire transfers are typically accompanied by a fee that is paid by the sender, recipient, or both. The fee is determined by the financial institution and type of transfer, and will either be a set amount or a percentage of the total amount being transferred. A wire transfer is also sometimes called a wire payment, bank transfer, or bank wire.

How do wire transfers work?

In order to start a wire transfer, as the sender, you must provide some important details about the recipient. This will likely include the recipient’s name and personal contact information, and their bank information, like account number and routing number. You’ll also need to specify the amount you’d like to transfer. Other information may be required, particularly for an international wire transfer, so check with your financial institution about exactly what you’ll need.

Once all the information is confirmed and the wire transfer fee is paid, your financial institution will initiate the wire transfer by contacting the recipient’s institution with payment instructions. When approved, the amount of the wire transfer is moved electronically between the two–debited from and credited to the proper accounts.

What is a credit card wire transfer?

A credit card wire transfer—like a regular wire transfer—involves sending funds electronically from one party to another. The main difference with a credit card wire transfer is that the money sent is on credit—instead of funded by cash—and usually comes with added fees and interest.

Before you go ahead and pay for a wire transfer on your credit card, consider the following.

Credit card wire transfers cost more

The reason credit card wire transfers are so expensive is that they’re often treated as cash advances by the credit card issuer. Credit card cash advances almost always come with an added fee associated, typically a fixed amount or a percentage of the advance.

One of the most common fee structures for credit card cash advances is either a set dollar amount or a percentage of the total amount you’re taking from your card account, whichever is higher. For example, if you were to use a credit card that charges cash advance fees of the greater of $10 or 5% to transfer $500, you’d pay an additional $25 on top of the fees charged by the wire transfer service.

Also, most card credit issuers charge a separate, higher APR for cash advances. And in most cases, interest begins accruing on cash advances as soon as they post, so there’s no way to avoid paying interest.

Every credit card charges different rates for cash advances, and your specific card’s charges can be found in its Schumer Box—a table or “box” found on credit card agreements that summarizes fees and interest rates. All other fees for the card will also be outlined there.

Did you know?

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How to minimize wire transfer fees

Paying for a wire transfer doesn’t have to come with added cash advance fees attached. Every wire transfer provider—rather it be a bank or a financial services company—has its own fee outline, and money may be saved by paying via bank account, debit card, or cash.

Whatever service you ultimately choose, be sure to check the transfer fee structure to avoid getting hit with surprise costs.

When you should wire money from a credit card

If your goal is to save money, the only time you should send money via a credit card wire transfer is when you have no other option. And before you send it, make sure you understand what the fee structure is and how much interest you may pay on a credit card wire transfer.

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