Money transfer credit cards

Compare money transfer credit cards

This could be an alternative to a loan if you need cash to cover a big purchase or pay off debt
Comparing with us won’t affect your credit score
Some money transfer cards have 0% introductory periods

What is a money transfer credit card?

A money transfer credit card is different from a standard credit card in that it lets you transfer money into your bank account. There’s often a money transfer fee (this varies depending on the provider), but many offer 0% interest on the outstanding balance for an agreed period.

The interest-free period you’re offered will vary depending on the provider and your personal circumstances, such as your credit rating. Some providers offer promotional interest-free periods of up to 12 months for eligible customers. After that period ends, interest will be charged on any outstanding debt.

Once you’ve transferred the money into your bank account, you can use it as you wish – to reduce an overdraft or debt, as well as cover any other expenses or make a cash-only purchase.

A money transfer credit card could be a good option if you need a short-term injection of cash but don’t want to take out a loan.

How do money transfer credit cards work?

Like any other credit card, you first need your application to be approved. You usually need to have a good credit score to be eligible for a money transfer credit card.

If you’re accepted, you’ll need to ask your credit card provider to make the transfer to a bank account in your name. You can’t just withdraw the cash and pay it into your account.

To qualify for a promotional interest-free period, you may also need to make the money transfer within a certain amount of time, often 60 days. A one-off transfer fee of around 3% to 5% will be added to your repayment, so remember to factor this into your calculations before deciding to transfer.

Making the most of 0% money transfer offers

Look for a money transfer credit card with an extended interest-free period (although not many providers offer this option). This means you won’t have to pay any interest on your repayments if you pay back the money in full by the end of the 0% offer. If you don’t pay it back by then, you’ll be charged interest on what you owe.

You’ll also need to make sure you stick to the terms of the card. For example, making at least the minimum repayment each month and not exceeding your credit limit. If you don’t, you could lose the promotional 0% rate.

Moving money between your money transfer credit card and your current account can be a useful way of managing short-term debts. However, you should always have a plan of how to repay the money you borrow before you make the transfer.

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What are the best ways to use a money transfer credit card?

You could use a money transfer credit card to make a cash-only purchase or pay off an existing debt – an overdraft, for example – to save on interest payments. But you need to be well-organised and disciplined. If you slip back into an overdraft, you’ll have made your problem worse.

You can also use a money transfer credit card to pay off existing high-interest loan debt. You’ll still need to pay off what you owe, but if you can do so before the end of the card’s 0% offer, you could save on interest payments. Be aware, though, that you may have to pay an early repayment charge if you pay off a loan early, so factor this in to your calculations.

You might also consider using a money transfer card instead of taking out a short-term loan. If you qualify for an extended 0% period, it could save you a lot in interest.

What to watch out for with money transfer credit cards:

As with all credit cards, you should only apply for one if you can financially manage the debt – ideally clearing the outstanding balance before the end of the interest-free period.

Make sure you can afford the minimum repayments each month. A missed payment could damage your credit rating and mean losing your 0% offer, making the debt much more expensive. It’s worth setting up a direct debit to make sure you don’t miss a payment.

And avoid making multiple applications for credit cards as this can damage your credit rating if you’re rejected. You can find out what cards you’re likely to be accepted for before you apply by using our credit card eligibility check.

Use our credit card eligibility check

Can I transfer money from a credit card to a bank account?

Yes, you can transfer money to your bank account using a money transfer card. This could be useful to pay off an overdraft. By transferring your overdraft to a credit card with a 0% interest period, and paying it off in full within the 0% period, you could save on interest payments.

However, you don’t necessarily have to pay off a debt. You could transfer money into your account, before spending it or withdrawing cash using a debit card. But bear in mind that the purpose of these types of cards is to help you pay off existing debts, not get into new ones.

Once you’ve used a money transfer card to pay into your bank account, the debt sits with that card. You’ll need to meet the minimum monthly repayments to pay off the amount you owe or risk getting into further debt.

Should I get a money transfer credit card?

It depends on your financial situation. Here are some of the pros and cons for getting a cash transfer credit card.

Advantages:

Useful for paying off existing higher interest debts and loans.
Can be used as a substitute for higher cost loans.
You can get a 0% interest period.
The transferred cash can be used for purchases where credit cards aren’t accepted.
Transfers are normally quick. If you’re approved, the money could be in your account by the next working day.

Disadvantages:

You may not get the full 0% interest period advertised. Once the interest-free period is over, any amount you still owe will be charged at your lender’s standard rate of interest.
You’ll normally be charged fees for using your card in other ways. And you may have to pay interest on other types of transactions – for example, purchases. Rates and fees vary, so look out for them when comparing money transfer credit cards.
You’ll need to meet the minimum repayment amounts each month or risk losing your 0% rate.
You’ll normally have limits on both the amount you can borrow on the card and the period you can borrow it for.
If you transfer money to your bank account and use the cash to pay for something, the purchase won’t be protected under Section 75 of the Consumer Credit Act.

How can I find out if I am eligible for a money transfer credit card?

Not everyone is eligible for a transfer credit card. Lenders will want to be sure that you have a good credit rating and can comfortably afford to pay back what you transfer.

Use our credit card eligibility checker to find out if you’re likely to be accepted for a cash transfer credit card. It’s a soft credit check, so won’t impact your credit score or leave a mark on your credit history.

We can help you compare money transfer credit cards that we think you’ll be eligible for, meaning you can get a good idea of what’s out there, including the interest rates, additional fees and any credit limits.

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.

Frequently asked questions

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

A money transfer card allows you to transfer borrowed cash into your current account, to pay off a debt like an overdraft.

A balance transfer card allows you to transfer debts from a credit card that’s charging you a high interest rate to a lower, or even a 0%, interest credit card.

Do money transfer credit cards affect my credit rating?

When you apply for a money transfer credit card, you’ll need to undergo a credit check. This will leave a mark on your credit history and, depending on whether you’re accepted or not, could impact your credit score.

If you use your card effectively, meeting all of your repayments and staying within your credit limit, you could see your credit rating improve. But if you fail to do this, your rating could get worse.

Will a money transfer credit card help me if I am in debt?

A money transfer credit card could potentially help you reduce the cost of certain types of debt. For example, if you’re struggling with a high-interest overdraft, you can transfer money from your card to your bank account and cover the amount you owe.

But remember that the debt then lies on the card and you’ll still have to pay off what you owe. However, if you transfer your overdraft to a money transfer card with a 0% interest period, and pay off what you owe in full within the 0% period, you could save on interest payments.

If you’re worried about debt, there’s plenty of free advice and support available. You can find debt advice services on the Money Advice Service website.

Can I use a credit card to withdraw cash from an ATM?

If you use a credit card to withdraw cash from an ATM, you’ll normally be charged a fee and you’ll be charged interest on the withdrawal from day one.

If you need cash, it’s probably better to wait for the money to be transferred to your account, then withdraw it with your debit card. But you may have to pay a money transfer fee.

If you’re looking for a credit card that can help you access cash, see our guide to cash advance credit cards.

How can a money transfer card potentially save me money?

Once the money is in your bank account, a money transfer card can help you pay off a high-interest debt, such as an overdraft, and save you from paying interest for a set time.

You need to be sure you can pay off the balance before the 0% period ends and make at least the minimum payment each month.

How long do money transfers take?

The time taken for money transfers depends on the provider. Some providers offer instant transfers, while others take a few days.

It can also depend on when the transfer is made. For example, if the transfer happens on a Friday night of a bank holiday weekend, it may not go through until the following Tuesday.

Should I get a personal loan or a money transfer card?

A money transfer card could be cheaper than taking out a personal loan because the transfer fee, combined with a 0% interest free period, could mean you pay back less interest overall.

Also, the flexibility of being able to pay back the entire amount at any time (as opposed to fixed monthly loan payments with potential charges for overpayment) could be a good option for some people.

However, you need to take into account that if you don’t clear what you owe on the card during the 0% period, you’re likely to end up paying a much higher APR than many personal loan rates. If that happens, you could consider moving what you owe to a balance transfer card to continue enjoying interest-free borrowing.

Are money transfer credit cards the best way to borrow cash?

If you need a short-term cash injection, a money transfer credit card could be a good way to borrow cash quickly. However, that doesn’t mean they’re the best or the cheapest way to borrow money.

You need a good credit score to qualify for a 0% money transfer credit card. Plus, once the 0% interest period ends, the interest rate will rise significantly, which could make it a very expensive way to borrow cash.

What’s the charge for a credit card money transfer?

Money transfer credit card charges are worked out as a percentage of the amount you’re transferring. Interest rates vary, but you can expect to pay anywhere up to about 5% of the amount transferred.

What our expert says...

"Used sensibly, money transfer cards can be a useful way of avoiding paying interest on overdrafts or loans attached to your bank account. However, they can also lead to charges if you fail to pay back the money within the interest-free period. Make sure you only transfer an amount you know you can pay back."

- The Editorial Team, Experts in personal finance, insurance and utilities