Money Transfer Credit Card

Table of Contents

What is a money transfer credit card?
What’s the difference between a money transfer and a balance transfer credit card?
The best 0% money transfer credit cards
Advantages of money transfer credit cards
Disadvantages of money transfer credit cards
Am I eligible for a money transfer credit card?
How to apply for a money transfer credit card
How to transfer money from credit card to bank account
How to use a money transfer card
Is a money transfer credit card right for me?
Money transfer credit card frequently asked questions

Money transfer credit cards are designed to transfer cash from your card to your bank account. As some cards let you borrow money interest-free for a fixed period, you can treat it like an interest-free loan. This can be a helpful way to clear an expensive overdraft, or other high-cost debts and loans – provided you can pay it off before the interest-free period ends.

The length of the interest-free period varies between providers. It will depend on your credit score and personal circumstances but, at the time of writing, it may be possible to get a money transfer card offering up to 12 months at 0% interest.

What is a money transfer credit card?

A 0% money transfer card is a type of credit card that lets you transfer money from your card to your bank account. This is a more cost-effective option than simply withdrawing cash from your credit card at an ATM and paying it into your bank, as doing this not only incurs transaction fees but also means you’ll be charged a higher interest rate as it’s considered a cash advance. Withdrawing cash from your credit card can also damage your credit score, which isn’t the case with a money transfer.

Once your application for a money transfer credit card has been approved and your account has been opened, you need to give the provider details of your bank account and they will make the transfer for you. In most cases, you will have a set amount of time to request a transfer, typically within the first 60-90 days after you open the account.

There’s usually a minimum transfer amount of around £100, and a maximum of 90-95% of your credit card limit. This leaves a buffer to cover charges that may be applied to your account.

Although you won’t pay any interest during the promotional period, you may have to pay a one-off transfer fee of up to 5%, and you’ll be charged interest on the remaining balance when the promotional period ends.

What’s the difference between a money transfer and a balance transfer credit card?

A balance transfer credit card lets you transfer money from your credit card to a new one with lower or 0% interest. This means you can clear or reduce an existing balance and save money on interest.
A money transfer credit card lets you move money directly to your bank account, where you can treat it as an interest-free loan, and pay off an overdraft or use it for cash-only purchases.

Providers sometimes offer a single card which can be used in both ways, although the interest-free period for money transfers is typically far shorter than it is for balance transfers.

The best 0% money transfer credit cards

If you’re considering applying for a money transfer card, look for one with the longest interest-free period, and calculate how much you will need to repay each month to clear the debt before you start being charged interest. You will need to make at least the minimum payment each month.

Don’t forget to check the one-off transfer fee, and the amount of time you have to make the transfer, as these vary between providers. You may be offered a shorter 0% interest money transfer period, depending on your circumstances. Missing monthly payments could result in the withdrawal of the promotional 0% interest period and harm your credit score.

Advantages of money transfer credit cards

The main advantages of money transfer credit cards are:

It can be a cheap way to borrow money. You may not be charged interest for up to a year – so it’s often cheaper than a personal loan.
It can help you to clear an expensive overdraft. Overdrafts can be the most expensive way to borrow. If you’re eligible for a high enough credit limit, you can use a money transfer card to pay it off. Clear the balance on your card before the 0% period ends and it can save you a significant amount of money in interest, clear your debt more quickly and improve your credit score.
You can use it to consolidate expensive debts. If you have existing high-interest debts, such as payday loans, you can transfer funds to your bank account and use the money to pay these off. Just be sure you can afford to repay what you borrow before you incur interest.

It’s a useful way to use funds from your credit card in situations where credit cards aren’t accepted. For example, if a tradesman doesn’t accept credit card payments, you can simply transfer the funds from your money transfer card to your bank account, and then withdraw cash.
It’s a quick process. Once you have been approved for a money transfer card and your account is open, the transfer will usually complete on the next working day, if not before.

Disadvantages of money transfer credit cards

Money transfer cards also have some disadvantages, including:

You will need a good credit score. Money transfer cards are usually only available to those with good credit scores. If your credit score is poor you may still be accepted but could be offered a shorter 0% period and lower credit limit.
Your purchases won’t be covered by Section 75 of the Consumer Credit Act 1974. This only applies to purchases between £100 and £30,000 made with a credit card, and doesn’t cover anything paid for with a credit card money transfer.
You will have to pay a money transfer fee. This can range from 3%-5%, depending on the provider. So if you transfer £1000, with a transfer fee of 4%, your credit card will be charged a total of £1040.
You can only transfer to your own account in the UK. Money transfers usually can’t be sent to an overseas bank account, or to an account that isn’t held in your name.
You can only make 0% transfers within a limited period. Unless you make the transfer within the period specified by the provider (typically within the first 1-3 months of opening your account) you will be charged interest on the amount you borrow.
There’s a minimum and maximum transfer amount. Most providers won’t let you transfer less than £100, or more than 95% of your credit limit.
If you miss any payments or exceed your credit limit you may lose your 0% deal. As well as being charged interest on the amount you borrowed, which could significantly increase your debt, you could also incur extra fees and damage your credit rating.
You will be charged interest when the 0% period ends. You can avoid this by calculating how much you can repay each month, and ensuring that you don’t borrow more than you afford. Ideally, you should aim to clear the balance before you are charged interest.
You may be charged interest on other transactions. Check the terms and conditions carefully as you may be hit with interest and other charges if you use your card for purchases, if you use it overseas, or if you use it to withdraw cash from an ATM.

Am I eligible for a money transfer credit card?

Money transfer cards tend to only be available to those with good credit scores. Before you apply, try using an eligibility checker to find out how likely you are to get the card you want, along with an idea of your credit limit and APR. This won’t appear on your credit report, and will reduce the chance of an unsuccessful application.

Although eligibility criteria vary between providers, in general you will need to be:

Over 18.
A UK resident.
Have a permanent address.
Earning a minimum annual income.
Not declared bankrupt or have any recent individual voluntary agreements (IVAs) or County Court Judgements (CCJs).

It’s also important to check your credit score. This is a three-digit number lenders can use when deciding to offer you credit. Many different factors influence your credit score, including missed or late payments, defaults or high use of credit.

Checking your credit score can reduce the risk of an unsuccessful application by allowing you to spot errors that need to be corrected, or take steps to improve your score. You can check your credit score for free with credit reference agencies like Experian and Equifax, or via platforms like ClearScore and Credit Karma.

How to apply for a money transfer credit card

Applying for a credit card can usually be done online or in person at a branch of the relevant bank. The provider will run a credit check, so you will need to share some information including:

Your contact details.
Your address (including all addresses for the last three years).
Your bank account details.
Your income.

You could get an instant decision if you apply online, but this varies between lenders so you may have to wait a few days to find out if your application has been successful.

If your application is approved, you will need to sign a credit agreement. If you apply online you can usually do this digitally, otherwise you will be sent paperwork to sign and return. Before you sign, check your credit limit, APR, any fees and charges and the minimum monthly payment as these might have changed since you applied.

Don’t sign unless you’re happy with everything, because you can walk away with no obligation. You have a 14-day cooling-off period, so even if you change your mind after you’ve signed you can cancel the agreement without explaining why. However, you will need to repay any money you have borrowed, plus any applicable interest.

If your application isn’t approved, resist the temptation to try again with a different provider because each application you make leaves a mark on your credit report. Several applications in a short period of time can give lenders the impression that you’re experiencing financial difficulties and make it even harder for you to get credit.

Instead, check your credit report to see what you could do to improve your credit score, and use eligibility checkers before your next application to reduce the risk of being turned down again.

How to transfer money from credit card to bank account

It’s best to request a money transfer as soon as your new money transfer credit card is open. You don’t want to waste any of the 0% period, and most providers give you a limited time to make transfers, in some cases this could be as little as 30 days.

All you need to do is follow these three steps:

Request the balance transfer from your new provider. You may be able to do this online or via an app, or you may need to do it over the phone. You will need to share your bank account details and confirm the transfer amount.
Wait for the balance transfer to complete. This could complete almost instantly, or the money could arrive in your bank account on the next business day.
Pay off your debt. It’s vital to pay at least the minimum monthly amount on your money transfer card, or you risk losing the 0% deal and damaging your credit score. Remember, you will be charged interest if you don’t clear the balance before the 0% period ends.

How to use a money transfer card

Most providers will allow you to make more than one money transfer, up to a maximum of around 90-95% of your credit limit, within the first 1-3 months of opening your account. Remember, you will have to pay a balance transfer fee each time, and you will pay interest on your outstanding balance when the 0% interest period ends. So it makes sense to only borrow what you need – and an amount you’re confident you can repay.

Even though you’re not paying interest on what you’ve borrowed, you still need to make the minimum payment each month – ideally more if you can afford it. If you forget, and miss a payment or pay late, there’s a risk that your 0% offer could be withdrawn, so it’s safer to set up a direct debit to ensure that your payment is always made on time.

You will be charged interest on your balance as soon as the 0% period ends. For this reason, work out how much you need to pay each month to clear your debt before this happens: simply divide the amount you owe (or, better still, plan to borrow) by the number of months that the interest-free deal lasts. This will indicate how much you would need to pay each month to pay it off. For example, if you borrow £1,000 and have 0% interest for 9 months, you would need to pay £112 per month to clear your debt in full before the promotional deal ends.

If this doesn’t seem feasible, you can avoid being hit by interest charges if you apply for a 0% balance transfer card and transfer the outstanding balance onto a new card so that you can avoid paying interest for a longer period of time.

Is a money transfer credit card right for me?

A money transfer credit card can be a cost-effective way to borrow money, but that doesn’t mean it’s the best option for you.

Even though you won’t be charged interest for a set period, you will still be borrowing money – so be sure that you can afford to meet the minimum monthly payments. Be realistic about what you can afford, and try to avoid transferring more than you can pay back before you’re hit with interest charges, which can quickly add up.

A new credit application will also leave a mark on your credit report, and that applies whether your application is successful or unsuccessful. This change should only be temporary, but it’s worth bearing in mind if you’ve been working hard to build your score.

If you’re already struggling financially, and are tempted to apply for a money transfer card because it seems like a good way to access some extra cash, this could quickly make your situation worse as your debt will increase.

Before you apply, consider all your options, including seeking free debt help from charities such as:

Yes, a type of credit card called a money transfer credit card allows you to transfer money from your card to your bank account. This can be useful if you need to make a payment where credit cards aren’t accepted, or if you would like to clear an expensive overdraft, for example.

You can use a money transfer card to move funds from your credit card to your bank account. This is a better option than withdrawing cash from your credit card at an ATM as this is considered a cash advance, which means you will incur transaction fees and often pay a higher interest rate. This can also damage your credit rating.

Each time you apply for a new credit card it will leave a mark on your credit file, which could temporarily affect your score. However, using a money transfer card won’t have as much impact on your credit score as withdrawing cash from your credit card at an ATM. To protect your score, make sure you make at least the minimum payment each month, and keep your credit utilisation (the percentage of your available credit that you are using) as low as possible.

Yes, you will be charged a money transfer fee when you move money from your credit card. This varies between providers but you can expect to pay a fee of up to 5% of the amount you transfer. So if you transfer £1000, you will be charged somewhere between £30 and £50.

With a money transfer card, you can move money straight from your credit card to your bank account. You will need to ask your provider to do this for you, and can expect to be charged a money transfer fee.

When you withdraw cash from your credit card at an ATM this is called a cash advance. Most providers will charge a transaction fee when you do this, and you will usually be charged interest at a higher rate. This can also harm your credit rating as some lenders view it as a sign that you’re struggling financially.

Once your account is open and you request a transfer, the money should usually arrive in your account the next business day. However, depending on the provider, the transfer may be almost instant.

This depends on your circumstances, the amount of money you want to borrow, and how long it will take you to repay. If you don’t need to borrow a large amount, and can afford to pay it back before the 0% interest period ends, then a money transfer card could be the cheapest way to borrow.

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