What Is a Credit Card Wire Transfer?
A credit card wire transfer — like a regular wire transfer — involves sending money 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 in cash — and usually comes with added fees and interest.
Before you go ahead and pay for a wire transfer on your credit card, it’s best to know if doing so is worth the cost.
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Why 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 a set dollar amount or a percentage of the total amount you are taking from your card account. 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 is 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. All other fees for the card will also be outlined there.
How to Minimize Fees
Paying for a wire transfer doesn’t have to come with added cash advance fees attached. Every wire transfer provider — be it a bank or a separate financial services company — has its own fee outline, and money may be saved by paying via bank account, debit card or cash.
“For transfers through nonbank providers, the fee can depend on the provider, amount, destination, delivery and payment options, and method of sending money (such as online or in person),” writes NerdWallet’s Spencer Tierney.
For the cheapest domestic transfer, Tierney recommends paying via ACH: “For domestic transfers that are less urgent or involve a smaller amount, ACH transfers — such as external funds transfers — are better. Delivery can take several days, but they cost a few bucks at most.”
Whatever service you ultimately choose, be sure to check the fee structure to avoid getting hit with surprise costs.
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When You Should Send Money via Credit Card Wire
Realistically — if your goal is to save money — the only time you should send money via wire transfer on a credit card is when you have no other option.
You should send money via wire transfer on a credit card when other options aren’t available and you’re prepared to pay the added fees (and higher interest if you pay over time) on the transfer.