Can You Buy a Car with a Credit Card?

You can buy a car with a credit card in certain circumstances. But it may be smart to ask yourself if this is the best way for you to purchase your vehicle. This post will take you through the pros and cons of buying a car with your card, as well as provide information about what you can expect from the process.

Buying a Car with a Credit Card

You’ve decided how much you want to spend on a new car, and you’ve negotiated a fair price with a dealer. But before slapping down your plastic to purchase a new or used car, you’ll first need to check with your car dealership to verify that they accept credit card purchases, which cards they accept, and how much of the total purchase price they will allow you to charge.

If you go to a dealer that won’t accept credit card purchases, or limits the amount, you’ll have to decide whether to pay another way or to go to another place that sells the car you want and allows credit card purchases.

However, if you’ve selected a car at a dealership that takes credit card payments, your next step is to check your credit limit to determine whether it’s high enough to use one card, or whether you’ll need to spread out the purchase over multiple cards.

If your combined limits aren’t enough, you could pay the difference with a cashier’s check and still reap some of the rewards-point benefits available through credit card use. Or you could ask your credit card companies to increase your limits.

It also makes sense to notify your credit card companies that you intend to use your credit cards to make a large purchase. If you don’t regularly make large purchases on your credit cards, the transaction might get flagged as potentially fraudulent and could get declined.

At a car dealership that does let you pay for a car with a credit card—or at least a portion of it—you might consider using a rewards credit card for that portion. If you have cash to pay the charge before it starts accruing interest, you’re basically getting a zero-percent, short-term loan while taking advantage of the credit card perks.

Recommended: What to Know About Managing Credit Card Rewards

Why Some Car Dealers Don’t Accept Credit Cards

On the surface it might seem odd that auto dealers wouldn’t accept credit cards. Afterall, they want to make a sale, right? Of course they do, but they, like other merchants, must pay processing fees for each credit card transaction they make. These fees tend to be around 2%, and they can add up pretty quickly when you consider that cars can cost in the tens of thousands of dollars. By rejecting credit cards, dealers can save themselves the expense and hassle of paying these fees.

If a dealer that normally doesn’t allow credit card purchases makes an exception, expect them to tack on convenience fees of 2% to 4% to help them cover the cost of the transaction. Pay close attention to these fees because they may offset any benefit you might gain from using a rewards card.

Pros of Car Buying With a Credit Card

Under certain circumstances, using a credit card to buy a vehicle can be an excellent strategy to consider, especially if you have money in the bank to pay off the balance in full when your statement comes.

In this scenario, you’ll have a fast and easy way to purchase your car of choice and, depending upon the credit card, you may earn rewards points, something you wouldn’t get if you simply used a cashier’s check to buy the car.

You may have slightly longer to pay off your purchase if you use a credit card that has a zero percent interest rate over a certain period of time, such as six months. In order to avoid interest payments, you must finish paying off your vehicle in that time period. This strategy may be riskier than paying off your full balance immediately. If, for some reason, you can’t pay the balance off within the introductory no-interest period due to unforeseen circumstances, then the card will revert to its regular rate, which may be quite high.

If that happens, the situation can go downhill from there, because some credit card companies will then charge the full interest rate on the entire purchase, not just on the remaining balance. So, in that case, nothing was free and you’ll end up paying a high interest rate on the total balance.

Cons of Car Buying With a Credit Card

The biggest reason not to buy a car with your credit card is that credit card interest rates are typically much higher than other available options. And in some situations you might get stuck with some costly fees.

For example, let’s say that your strategy is to purchase a car on your current credit cards, then transfer the balance to a zero-interest credit card. Besides the challenges listed above, you may add transfer balance fees to the mix. These fees can be as high as 5%, which, on a $20,000 car, is $1,000.

Here’s something else to consider. Having different kinds of debt can actually help with your credit score, so using an installment loan, such as a traditional auto loan, to buy your car instead of a credit card may be helpful to your overall long-term financial situation. And if your credit score is good enough to gain approval for an auto loan with lower interest rates than the average credit card’s rates, you’ll be coming out ahead.

Other Options for Buying a Car

If you decide to finance some or all or all of your auto purchase, you can apply for a car loan through the dealership or other lenders. Auto loans are typically secured loans that use the vehicle as collateral. So, if you fail to make payments, your lender has the option to repossess the vehicle to cover some of your debt.

Dealers are often able to get same-day financing approved, but there may be some pressure to buy while the salesperson takes advantage of your excitement. Banks and private lenders may take longer to approve an application, but sometimes offer better deals on terms or interest rates. Taking emotion out of the equation when buying a car will allow you to compare rates and terms to get the best deal for your financial situation.

You may also want to consider buying a car with a personal loan, which is an unsecured loan that’s not backed by collateral. Personal loans can be used to cover many expenses, including the cost of buying a car. Because they are unsecured, interest rates on personal loans may be higher than other auto financing options, depending on the applicant’s creditworthiness.

The Takeaway

If buying a car is in your future, and you’re ready to start saving, a good move may be to start saving in an account like SoFi Money®, a cash management account where you can save, spend, and earn all in one place.

You can easily create vaults within your SoFi Money account, each for its own purpose (like one for a car fund).

Get started with SoFi Money today to save for your dream car.


SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
The SoFi Money® Annual Percentage Yield as of 03/15/2020 is 0.20% (0.20% interest rate). Interest rates are variable subject to change at our discretion, at any time. No minimum balance required. SoFi doesn’t charge any ATM fees and will reimburse ATM fees charged by other institutions when a SoFi Money™ Mastercard® Debit Card is used at any ATM displaying the Mastercard®, Plus®, or NYCE® logo. SoFi reserves the right to limit or revoke ATM reimbursements at any time without notice.

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Can You Pay a Credit Card with a Credit Card?

Your credit card payment is fast approaching, and you’re freaking out. The problem isn’t paying the total balance—it’s that you can’t even afford the minimum required payment. Can you pay a credit card with another credit card? Yes and no.

Most credit card rules won’t allow it—at least not directly. It’s simply too expensive for credit card companies to process these transactions.

There are a couple of indirect ways you can pay a credit card with a credit card: cash advances and balance transfers. Even better, there are longer-term solutions that don’t involve a second credit card.

Avoiding the Issue in the First Place

The best way to avoid a situation in which you are considering using one credit card to pay another is by paying your entire credit card statement balance every month.

Making credit card payments in full and on time will allow you to avoid paying interest.

Paying the statement balance in full each billing cycle also reduces the chance of accumulating debt that is hard to pay off.

At the very least it is important to make minimum payments to avoid negative effects on your credit score.

Recommended: Why is Credit Card Debt So Hard to Pay Off?

Paying a Credit Card With Another Credit Card

Taking a Cash Advance

You can’t pay one credit card with another directly, but you might be able to pay a credit card with a cash advance from another card.

Let’s say you have two credit cards: Card A and Card B. You can’t afford to make your minimum payment on Card A, so you’re looking to Card B for a little help. You have the option to take a cash advance from Card B.

You could use Card B to withdraw cash from your checking or savings account at an ATM. Then you’d deposit that money into your checking account and make an online payment from your bank account or with a debit card.

Pros of a Cash Advance

Taking out a cash advance may be the right option if your situation meets three criteria: You’re trying to pay a small amount on Card A, you already have a second credit card to use for this transaction, and Card B has a lower interest rate than Card A.

Most credit card companies limit how much cash you can withdraw with your credit card per month. If your withdrawal limit from Card B is $5,000, though, and you want to make a payment of $500 on Card A, things shouldn’t get too sticky.

Cons of a Cash Advance

Your credit card company might not allow you to withdraw enough money per month to pay off your other credit card. Your cash advance limit isn’t necessarily the same as your monthly spending limit. Before you take a cash advance, you may want to contact the company that issued your second card to inquire. Or check a statement.

Also, interest usually starts accruing on the amount you withdraw from the moment you take the cash advance. The annual percentage rate (APR) for a cash advance will typically be higher than the purchasing APR on the card. As a result, it’s possible to go even further into debt.

What’s more, you’ll likely pay a fee to take a cash advance. The amount will depend on the credit card company, but you can usually expect to pay the greater of $5 to $10 or 3% to 5% of the amount you withdraw.

Completing a Balance Transfer

If you don’t have another credit card, or your cash advance allowance is too low, you might consider a balance transfer, which would allow you to transfer the balance on Card A to Card B.

Ideally Card B would have a lower interest rate or none at all. You could potentially pay off the total balance more quickly because more of the money you used to pay in interest is going to pay off the principal, or you’re not accruing interest at all.

You may complete a balance transfer only by using a designated balance transfer credit card.

Pros of a Balance Transfer

Certain credit card companies offer balance transfer credit cards with no interest for the first six months or more. When you shop around for a new card, you’ll typically hear the grace period referred to as an “introductory balance transfer APR period” or “promotional period.”

During this period, you can work on paying off your debt without paying any interest.

Cons of a Balance Transfer

While balance transfers may be a godsend for paying off your balance in a set amount of time, what if you can’t nibble away at the total balance quickly?

Once the introductory balance transfer APR period ends, the interest rate will shoot up, and the balance transfer card won’t seem so magical anymore.

If you miss a payment, most companies will suspend the introductory APR period on Card B, and you’ll have to pay what’s known as a default rate, which could end up being even higher than the rate on Card A. Even if you consider yourself responsible enough to make all your payments on time, a financial emergency could throw you off track.

There are also generally fees associated with balance transfers, though they’re often lower than cash advance fees.

It’s worth mentioning that you can’t use balance transfers or cash advances to get credit card points or miles.

What If I Can’t Pay My Minimum?

If for whatever reason a cash advance or balance transfer isn’t available to you, you may still have trouble making your minimum payments. If this is the case, stay calm and assess your situation.

You may want to gather your credit card statements and put your debts in order, either from largest to smallest or from highest interest rate to lowest. This step can help you understand how much debt you’re in and how to prioritize your bills.

You may decide to tackle the largest debts first, or even your smallest to gain momentum. Or you may decide to save money on interest by focusing on credit cards with the highest interest rate first.

You may consider talking to your creditors to see if they can help. A credit hardship program could give you more time to pay off your balance or adjust your terms.

What About a Personal Loan?

Taking out a personal loan is an option for paying off a large credit card bill. A personal loan may come with a lower interest rate than a credit card, and may be more manageable in the long run.

Pros of a Personal Loan

Most credit cards come with variable interest rates, meaning the rate can change over time with shifts in the economy. An unsecured personal loan usually has a fixed rate. (Unsecured means the loan isn’t secured by collateral, like your home or car.)

If you have a good credit score, your rate for a personal loan could potentially be lower than your credit card rate.

If that is the case, you could take out a credit card consolidation loan, then make payments on the loan at the lower interest rate. You’d likely end up paying less in interest over time and might be able to pay back the loan more quickly than you’d be able to pay off the credit card.

Taking out a personal loan also could help your credit utilization ratio, the amount of available revolving credit you’re using. Credit utilization affects your credit score.

Your credit score also is favorably affected when you’re able to consistently pay bills on time.

Cons of a Personal Loan

Taking out a personal loan to pay off a credit card isn’t for everyone. Maybe you’ve realized you have trouble controlling your spending, and that’s why you have credit card debt to begin with. Having a personal loan to fall back on could tempt you to spend even more with your credit card.

Also, a lower interest rate isn’t guaranteed. If you discover that your loan rate could be higher than your card’s rate after inquiring with a lender, taking out a loan may not be the best choice.

No matter how low your personal loan interest rate is, it will still be higher than the rate during an introductory APR period for a balance transfer.

The Takeaway

Can you pay a credit card with another credit card? Indirectly, yes, with a balance transfer or cash advance. While those moves can work in a pinch, each has potential drawbacks.

Taking out a fixed-rate personal loan with a clearly defined payment schedule may be the better long-term option. SoFi offers personal loans with no fees.

Looking to get on top of your debt? Check your rate on a SoFi Personal Loan.


SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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5 Ways to Make Your Money Work For You

You work hard for your money, so your money should work hard for you. But let’s be real—unless you receive a life-changing windfall, growing wealth doesn’t usually happen overnight. Making your money work for you is more like a marathon that requires planning, diligence, and financial smarts.

Thanks to the advent of online banking, 21st-century financial technology, and the democratizing notion that investing should be accessible to everyone, you no longer need to have existing wealth to build future wealth. Check out these five ways your money can work just as hard for you as you work for it.

How to Make Your Money Work for You

1. Ditching the Fees

Yes, financial professionals should make a living. But, no, they don’t have to do so by diminishing your ability to accumulate wealth.

Bank Fees

How do banks charge you? Let us count the fees. The list can include fees for account maintenance, returned deposits, foreign transactions, falling below the account minimum, receiving paper statements, replacing a lost or stolen card, using a non-network ATM, overdrawing your account, making too many savings withdrawals, writing too many checks, closing an account, not using an account enough, speaking with a human, paying late, or even paying off a loan too early.

Federal Deposit Insurance Corporation figures show that from 2015 through 2019, the amount of overdraft fees reported by banks increased by 4.5%, from $11.18 billion to $11.68 billion. So it may not be surprising that, on average, the reporting banks made nearly 40% of their income from fees. One reporting bank made nearly 90% of its income from overdraft and insufficient funds fees. That’s your money. Going into their pockets. Ouch.

The average overdraft fee in 2020 was $33.47, but there is no federal law that places a maximum amount a bank can charge for an overdraft. Banks must get a customer’s permission before charging overdraft fees on ATM or debit card transactions, meaning a customer must “opt in” to this arrangement. It’s a good idea to ask your bank about their “opt-in policy.”

Investment Fees

Paying a traditional financial advisor a percentage of your account balance to manage, monitor, and optimize your portfolio could be worth the expense, but what fee you’re comfortable paying is really dependent on your financial situation and the time you have to put into managing your own investments.

A 1% per-year fee based on your portfolio balance is considered reasonable for financial advice. Seeking out a fiduciary financial advisor whom you feel comfortable working with is recommended. They are legally obligated to work in their clients’ best interests, instead of working just to earn the highest fee possible for themselves.

A growing number of financial companies are offering financial advising services with little or no fees—and no humans. Robo-advisors are becoming more popular because they use algorithms to optimize portfolios, thus eliminating the overhead of live employees. Still other products like SoFi Invest® offer the best of both worlds, with human advisors willing to help without extra cost to the consumer.

ATM Fees

At an average of $4.64 a pop , out-of-network ATM fees can add up quickly. And “I just need to stop at the ATM really quick” is a phrase that’s likely uttered often, since 60% of Americans ages 25 to 34 and 51% ages 35 to 49 withdraw $40 eight to 10 times a month.

One way to avoid paying ATM fees is to always make sure that you’re using an ATM in your bank’s network. However, if you’re on the road or your bank only has a few networked ATMs, that can be a challenge. Federal law requires ATM operators to notify consumers, before they complete their transaction, that they may be charged a fee. So any fee you may be charged won’t be a surprise on your monthly bank statement. Fee amounts for electronic transactions, such as ATM fees, are not specifically regulated by the federal government, however. Some of the guidance given by federal banking authorities is that banks’ fees should be competitive with other banks in the area and not made as a result of any agreement with other banks, and that banks should take their costs of providing the service into consideration. That leaves a lot of room for interpretation.

Just like bank fees, however, more and more financial institutions are offering fee-free ATM usage as part of their perks. If you also use a checking account that doesn’t charge other fees, this can add up to hundreds of dollars in savings for an average user.

2. Making Debt Payoff a Priority

When you begin to repay a loan, it’s possible that your early payments could be almost entirely interest vs. the principal payment. And credit card payments can be complicated, with a minimum monthly payment that changes each month based on the balance and any accrued late fees or interest.

Several debt-payment philosophies can help you get out of paying and into saving, including the snowball, avalanche, and fireball methods. Consolidating various debts into one low-interest personal loan can be another way to get out from under those high-interest payments and get on a fixed payment schedule.

Using a credit card interest calculator can be helpful to get a realistic idea of how much interest you’ll likely pay and how long it may take to pay off the amount of debt you have. For instance, paying $200 per month on a $5,000 credit card balance with an interest rate of 25% will take three years to pay off and cost $2,136 in interest charges. But increasing the monthly payment will decrease both payoff time and total interest paid.

3. Getting Rewarded for Saving and Spending

If banks can charge you just to do business with them, you might as well find a way to make some money on your end of the deal. One way to turn the tables and make your money work for you is to open a high-yield savings account.

Instead of keeping your money in a traditional savings account that may offer only very low interest rates, considering a high-yield savings account that might pay interest rates 15 to 20 times the current national average could boost your savings in a significant way.

Other ways to get rewarded for spending are retailer loyalty programs, coupons, or rebate apps. Rewards credit cards can be another effective way to save at your favorite store. Depositing any cash rewards earned from cashback credit cards straight into that high-yield savings account is an easy way to boost your savings. Using rewards credit cards can be a good financial move, provided you pay your statement balance in full every time it comes due.

4. Eliminating Waste

Have you ever thought you were keeping up with your checking-account balance, only to realize you’re overdrawn? Where the heck did all that money go? Tracking where your money goes could help you identify and reduce (or even eliminate) areas where you’re overspending—much like keeping a food journal when you’re trying to eat healthier.

But how can that be an easy task when life gets busy? Using a budgeting app that categorizes spending, automates bill payments and savings contributions, and even tracks goals might be an option, as entries and adjustments can be made while you’re out and about. Keeping all the numbers available quickly may keep you motivated to stick to your financial goals.

5. Investing in Your Future

It’s true that you can’t take your money with you when you go. But with an average life expectancy at 77.3 years , it’s also likely to be a long time before you get there. The average American worker expects to retire at age 65, but some people leave the workforce earlier and some people leave later. Data compiled by the Bureau of Labor Statistics projects a slight increase in the percentage of workers aged 55 and older by 2029—25.2% up from 23.4% in 2019.

Only 29% of people surveyed in the 2021 Retirement Confidence Survey® , conducted annually since 1990 by Employee Benefit Research Institute (EBRI) and the independent research firm Greenwald & Associates, indicated they feel “very confident” that they will be able to retire comfortably. Even if you plan to work later than the average retirement age, being confident in your ability to retire with a financially comfortable lifestyle is a good goal to strive for.

Creating a long-term investment plan is one way to work on having enough set aside to one day ditch the working world for good. Even if it’s just a few bucks here or there, a diversified portfolio combined with the magic of compounding returns could help you get there. Investing has the potential for a higher return vs. a savings account, but the reward isn’t guaranteed. Unlike cash-based interest accounts, your portfolio balance is likely to fluctuate with the market. Because of the risk associated with putting money into the market, some people may be hesitant to jump in, especially if they don’t fully understand how investing works. But if you start early and save often, it’s possible to head into retirement having made good progress on your financial goals.

The Takeaway

Everyone’s financial situation is different, and what makes sense for one person may not work for another. But with some careful planning and solid financial advice, you can figure out how to make your money work for you. Using financial technology tools to set goals and work toward them can make it easier to get to where you want to go, financially speaking.

Looking for Something Different?

If you’re ready to start saving and investing to meet your goals, one option may be a cash management account like SoFi Money®. With no-fee overdraft coverage for qualifying accounts and no fees for in-network ATMs in the Allpoint® Network, you can keep more of the money you work hard to earn. Also, SoFi Money is an interest-bearing account, so it’s another way your money can work for you.

Explore the benefits of a SoFi Money cash management account and start putting your money to work.


SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
As of 6/9/2020, accounts with recurring monthly deposits of $500 or more each month, will earn interest at 0.25%. All other accounts will earn interest at 0.01%. Interest rates are variable and subject to change at our discretion at any time. Accounts opened prior to June 8, 2020, will continue to earn interest at 0.25% irrespective of deposit activity. SoFi’s Securities reserves the right to change this policy at our discretion at any time. Accounts which are eligible to earn interest at 0.25% (including accounts opened prior to June 8, 2020) will also be eligible to participate in the SoFi Money Cashback Rewards Program.
The SoFi Money® Annual Percentage Yield as of 03/15/2020 is 0.20% (0.20% interest rate). Interest rates are variable subject to change at our discretion, at any time. No minimum balance required. SoFi doesn’t charge any ATM fees and will reimburse ATM fees charged by other institutions when a SoFi Money™ Mastercard® Debit Card is used at any ATM displaying the Mastercard®, Plus®, or NYCE® logo. SoFi reserves the right to limit or revoke ATM reimbursements at any time without notice.
Each business day, cash deposits in SoFi Money cash management accounts are swept to one or more sweep program banks where it earns a variable interest rate and is eligible for FDIC insurance. FDIC Insurance does not immediately apply. Coverage begins when funds arrive at a program bank, usually within two business days of deposit. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank). If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be lower. For more information on FDIC insurance coverage, please visit www.FDIC.gov . Customers are responsible for monitoring their total assets at each Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits in SoFi Money or at Program Banks are not covered by SIPC.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Any SoFi member who receives $1,000 or more in qualifying direct deposits into their SoFi Money account over the preceding 30 days will be eligible for Overdraft Coverage. Overdraft coverage only applies to SoFi Money accounts and is currently unavailable for Samsung Money by SoFi accounts. Members with a prior history of non-repayment of negative balances for SoFi Money are also ineligible for Overdraft Coverage.
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How to Transfer Money From One Bank to Another

There may be times when you want to transfer money from one bank to another. Maybe you’ve opened a high-yield savings account at a new bank and want to set up regular transfers from your existing checking account.

Or, perhaps you want to send money to someone else, such as a friend or family member, which also requires a bank-to-bank transfer.

If you’re transferring money to an account that you also own, using your bank’s online transfer service can be a simple solution. If you’re sending funds to someone else’s bank account, your options include writing a check, using a peer-to-peer payment service or app, or making a wire transfer.

Here’s a look at different ways to transfer money from one bank account to another, and which method is best for each situation.

Making an Online Transfer From One Bank Account to Another

Setting up external transfers from your bank account to an account you own at a different financial institution can seem confusing. But once you know the steps, it can actually be simple to execute. The process typically involves:

1. Linking the Two Accounts

If you want to transfer money from bank A to bank B, you’ll want to log into bank A’s account, then choose the option to “add an account,” “link account,” or “add external account.” You can often find these options, or something similar, in your bank’s “customer service” or “transfers” menu.

2. Adding the Information for the Other Bank

Bank A will likely ask for the routing number (a nine-digit number) and account number (eight to 12 digits) for bank B. You can find these numbers on a check, typically along the bottom (the routing number comes first, followed by the account number, then the check number). If you don’t have checks, you can also find the bank’s routing number on their website, and your account number on your monthly statement.

3. Verifying You Own the Second Account

To prove that account B belongs to you, bank A make ask you to input the username and password you use for bank B. Another way bank A may verify the account is to make a small deposit (maybe a few cents) and ask you to confirm the amounts, a process that might take a day or two to complete.

4. Setting Up the Transfer

Once the account is confirmed, you can choose an amount you want to transfer from bank A to Bank B and the date you want it to occur. You can also choose to make it a one-time transfer or a recurring transfer (such as once a month). You can then select the option to submit your request.

These steps will work whether you are transferring funds to a brick-and-mortar bank or to an online-only financial institution.

Transferred funds typically arrive at their destination in two or three business days. The timing will depend on which banks you use and whether you are moving money internationally or domestically.

While transferring money between linked bank accounts at different institutions is often free, you might be limited in the amount you can transfer each time. It can be a good idea to check your financial institutions rules for bank-to-bank transfer limits.

Other Ways to Transfer Money From One Bank to Another

Online bank-to-bank transfers are typically only an option if you are the owner of both accounts.

If you want to transfer money from your bank account to someone else’s bank account, you will likely need to find an alternative bank transfer solution. Below are some other ways to transfer money from one bank account to another.

Writing a Check

It may seem old-fashioned, but writing a check is still a useful way to make a bank-to-bank funds transfer. When you write a check, you are authorizing your bank to transfer funds to the recipient.

You can also make a check out to yourself by entering your own name as the payee. This can be a good option if you are closing out a checking account and want to transfer the remaining funds into a new account. If you take advantage of mobile deposit, you can write a check from one account and deposit it into a different account without ever leaving home.

You may want to keep in mind, however, that writing a check is not an instant money transfer. It can take a few business days for a check to clear and be available in the new account.

Also, if there aren’t sufficient funds in the account to cover the check, it will “bounce” and the payment won’t go through. You may also be charged a fee. To avoid this glitch, you’ll want to make sure you have sufficient in your account before writing a check.

Recommended: How To Open a Free Checking Account

Peer-to-Peer Transfer

Whether you’re reimbursing your roommate for the monthly rent or splitting dinner with a friend, a peer-to-peer (P2P) money transfer service or app can be a good solution.

Services like Venmo and Paypal are easy to use, and once your bank account is linked in the app, you can quickly type in a dollar amount, select the recipient, and hit “Send.”

These services are typically free if you fund the payment from your bank account. There may be a fee, however, if you fund a transfer with a debit card or credit card. Many banks offer free or inexpensive P2P transfers through Zelle or a similar vendor.

Payment apps may limit the amount you can transfer in a day or within a week, and some do not allow international transactions. Before using a P2P service, It can be a good idea to familiarize yourself with the company’s fees, timing, and limitations.

Wire Transfer

If you need to send a considerable amount of money to someone quickly and/or the recipient is located overseas, you may want to consider a wire transfer.

A wire transfer is one of the fastest and most secure ways to transfer money electronically from one person to another. It can be done through a bank or a nonbank wire transfer company, such as TransferWise or Western Union. You can make a wire transfer either in person, over the phone, or online.

If you are making a wire transfer to another bank in the U.S., the funds may be available within one business day or even a few hours. Sending money to a bank in another country may take more time to process.

There is usually a fee involved in making a wire transfer. Also, since wire transfers are not reversible, you’ll want to make sure you are sending money to the correct recipient and not a scam artist.

To make a wire transfer, you’ll likely need to have the recipient’s bank name, routing number, and account number.

There May be Limits on How Many Transfers You Can Make

You can typically make as many transfers into a savings account as you would like, but there may be some limitations when it comes to taking money out of a savings account.

Online withdrawals from savings accounts are governed by the Federal Reserve’s Regulation D . The federal government has temporarily suspended its Regulation D limits on the number of withdrawals allowed from a savings account each month due to the 2020 pandemic. However, some banks are still enforcing the limit of six withdrawals per month and will charge an excessive withdrawal fee for each transaction over the limit.

It can be a good idea to check your financial institution’s rules before you try to transfer money from a savings account into a different account. Transfers count as one of the kinds of withdrawals that may be limited.

The Takeaway

There are multiple ways to transfer money from one bank to another. The best option will depend on where you are sending the money, and whether or not you own both accounts.

If you do own both bank accounts, one of the simplest options is to log on to your account and set up an online transfer to an external account. This will also enable you to regularly transfer money to that account.

If you often send small amounts to other people, you may want to use an app like Venmo to make the transfer. However, if you need to move large amounts of money to someone else’s account and/or the recipient is overseas, you may want to go with a wire transfer.

If speed isn’t a concern, writing a check is a simple, old-school way to make a bank-to-bank transfer.

Looking for Something Different?

When you open a SoFi Money® cash management account, you can use the app to quickly transfer money to another person’s account. If the recipient is also a SoFi Money account holder, they’ll get access to that money immediately.

Find out how easy it is to send and receive funds with SoFi Money.


SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Is A Joint Bank Account Right For You?

If you’ve recently gotten married or moved in with your mate, you may wonder whether it makes sense to combine your funds in a shared account, or to continue keeping your finances separate.

Opening a joint checking account can make it much easier for a couple to pay, plan, and track household and other shared expenses. The trade-off to that convenience, however, is giving up some of your financial privacy and independence.

To help you decide if opening a joint account makes sense for your situation, read on. We’ve got all the pros and cons, plus tips on how to open a joint account, along with some alternatives to consider.

How Does a Joint Account Work?

A joint account functions just like an individual account, except that more than one person has access to it.

Everyone named on a joint account has the power to manage it, which includes everything from deposits to withdrawals.

Any account holder can also close the account at any time. And, all owners of a joint account are jointly liable for any debts incurred in relation to the account.

Two or more people can own a joint account–and, they don’t have to be a married couple or even live at the same address.

You can open a joint account with an aging parent who needs assistance with paying bills and managing their money. You can also open a joint account with a teenage child, friend, roommate, sibling, or business partner.

Recommended: How to Combine Bank Accounts

Benefits of Having a Joint Bank Account

Here are some of the pros of opening a joint account.

•  Ease of paying bills. When you’re sharing expenses, such as rent/mortgage payments, utilities, insurance and streaming services, it can be a lot simpler to write one check (or make one online payment), rather than splitting bills between two bank accounts. A shared account can simplify and streamline your financial life.

•  Transparency. With a joint checking account, there can’t be any secrets about what’s coming in and in and what’s going out, since you both have access to your online account. This can help a newly married couple understand each other’s spending habits and talk more openly about money.

•  A sense of togetherness. Opening a joint bank account signals trust and a sense of being on the same team. Instead of “your money” and “my money,” it’s “our money.”

•  Easier budgeting. When all household and entertainment expenses are coming out of the same account, it can be much easier to keep track of spending and stick to a monthly budget. A joint account can help give a couple a clear financial picture.

•  Banking perks. Your combined resources might allow you to open an account where a certain minimum balance is required to keep it free from fees. Or, you might get a higher interest rate or other rewards by pooling your funds. Also, in a joint bank account, each account holder is insured by the FDIC, which means the total insurance on the account is higher than it is in an individual account.

•  Fewer legal hoops. Equal access to the account can come in handy during illness or another type of crisis. If one account holder gets sick, for example, the other can access funds and pay medical and other bills. If one partner passes away, the other partner will retain access to the funds in a joint account without having to deal with a complicated legal process.

Challenges of Having a Joint Bank Account

Despite the myriad advantages of opening a joint account, there are some potential downsides to a shared account, which include:

•  Lack of privacy. Since both account holders can see everything that goes in and comes out of the account, your partner will know exactly what you’re earning and how much you are spending each month.

•  Potential for arguments. While a joint account can prevent arguments by making it easier to keep track of bills and spending, there is also the potential for it to lead to disagreements if one partner has a very different spending style than the other.

•  No individual protection. As joint owners of the account, you are both responsible for everything that happens. So if your partner overdraws the account, you will both be on the hook for paying back that debt and covering any fees that are charged as a result. If one account holder lets debts go unpaid, creditors can, in some cases, go after money in the joint account.

•  It can complicate a break-up. If you and your partner end up parting ways, you’ll have the added stress of deciding how to divide up the bank account. Each account owner has the right to withdraw money and close the account without the consent of the other.

•  Reduced benefits eligibility. If you open a joint account with a college student, the joint funds will count towards their assets, possibly reducing their eligibility for financial aid. The same goes for an elderly co-owner who may rely on Medicaid long-term care.

How to Open a Joint Bank Account

If you decide opening a joint account makes sense for your situation, the process is similar to opening an individual account. You can check your bank’s website to find out if you need to go in person, call, or just fill out forms online to start your joint account.

Typically, you have the option to open any kind of account as a joint account, except you’ll select “joint account” when you fill out your application or, after you fill in one person’s information, you can choose to add a co-applicant.

Whether you open your joint account online or in person, you’ll likely both need to provide the bank with personal information, including address, date of birth, and social security numbers, and also provide photo identification. You may also need information for the accounts you plan to use to fund your new account.

Another way to open a joint account is to add one partner to the other partner’s existing account. In this case, you’ll only need personal information for the partner being added.

Before signing on the dotted line, it can be a good idea to make sure you and the co-owner know the terms of the joint account. You will also need to make decisions together about how you want this account set up, managed, and monitored.

Alternatives to a Joint Bank Account

If you’re not keen on opening a joint bank account, but do need some type of money management system, here are some alternatives you may want to consider.

•  Adding an authorized user to an existing individual bank account. An authorized user has access to the account, but they’re not an owner. You still have full control, which means you can remove them from the account at any time.

•  Joint bank account, plus separate accounts. This allows couples to streamline payment for shared expenses, but also gives each partner some freedom to spend on themselves without having to explain or feel guilty about their expenditures.

•  View-only account. A view-only account gives another person the opportunity to view transactions, but they don’t have the power to manage the account.

•  Joint credit card. A joint credit card allows both you and your partner to use it. If your partner isn’t responsible with the card, however, it can affect both of your credit scores.

The Takeaway

One of the main pros of opening a joint checking account as a couple is that it can simplify paying for shared expenses. Having a joint account can also provide a couple with a clear financial picture, and make it easier for them to track spending and stick to a budget. A joint account also fosters openness and teamwork.

On the downside, sharing every penny can sometimes lead to tension and disagreements, especially if partners have different spending habits and personalities. And, if your partner isn’t responsible with money, you can end up paying for their mistakes.

If you decide to open a joint account, communication can be key. It can be a good idea to lay out expectations with the other account holder and also have regular open and honest discussions about money.

Looking for Something Different?

For couples who are ready to integrate their finances, SoFi Money® makes it easy to create a joint account that gives couples shared access to their money.

When you open a SoFi Money cash management account, you’ll have the option to add a joint account holder. Your partner will then receive an application and, once they fill it out, you can simply approve them as a joint owner of the account from your SoFi account dashboard.

Whether you opt for two individual or one joint account, you and partner won’t pay any account fees, monthly fees, or other common fees.

Learn more about opening a joint cash management account with SoFi Money.



SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank. SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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