What is a money transfer credit card?
Money transfer credit cards, sometimes known as cash advance cards, let you move available credit from your card to your bank current account. Many money transfer cards have zero – 0% - interest rates for several months. But you will typically have to pay a set fee to make a transfer.
You can then use the money to make purchases, withdraw cash and transfer money to people, or simply to pay off an overdraft.
The money you’ve transferred from the available credit on your credit card to your current account will need to be paid back.
How does a money transfer credit card work?
You can use your money transfer credit card to:
- Transfer available credit to your current account to then use as cash. There might be a limit to how much of your available credit you can transfer
- Transfer a balance from another credit card to pay 0% interest on the money you owe
You will usually have to pay a fee to transfer cash from your credit card to a current account or to transfer a balance from another credit card or loan to your money transfer credit card.
Money transfer credit cards will usually offer 0% interest on the money you owe on your credit card for a set period of time. This means you won’t pay interest on your repayments if you meet the minimum monthly repayment amount. And you won’t pay any interest when using your card if you pay the balance back in full before the 0% deal ends.
Once the 0% interest rate period is over you will usually have to pay a high interest rate on the money you still have on your money transfer credit card.
You can also use your credit card to make purchases. Money transfer credit cards can still offer 0% interest on your spending, but the 0% purchase period will often be for a shorter time than money and balance transfer deals. The interest rate will then rise after this.
Using your money transfer credit card to transfer cash
A money transfer credit card can help you access any money you need in your current account to withdraw money for unexpected bills, purchases or to transfer money to someone. Money can be transferred from your card to appear in your current account as soon as the next day.
You’ll need to login to your credit card account and enter the details of the current account you want to transfer the money to.
There’ll normally be a minimum and maximum amount you can transfer. The maximum money transfer amount will depend on your credit limit, the maximum percentage of your available credit you’re able to transfer and how much available credit you have.
The money transfer fee will then be added to your credit card balance. This will be a percentage of the amount you transfer.
You’ll usually have to use your money transfer credit card to transfer cash within a set number of days – this could be within 60 days of receiving your card – to activate the 0% deal.
Once the interest-free period is over the rate will be then be much higher.
Using your money transfer credit card to transfer a balance
If you have an existing credit card balance that’s building up interest then you could move the balance to a money transfer credit card to take advantage of lower interest rates. The balance you’re transferring will need to be on a credit card or store card from a different provider.
You’ll need to login to your money transfer credit card account and let your new provider know how much you want to transfer and from which card. Your new provider will then send a transfer request to your current card provider.
You can also transfer a loan balance to a money transfer credit card to take advantage of lower interest rates. You’ll need to request an early settlement figure from your loan provider to do this.
There will be a minimum balance transfer amount and a limit to the balance you can transfer to your credit card based on your available credit limit. The balance transfer fee will then be added to the money you move to your card. This will be a percentage of the amount you transfer.
You’ll usually have to use your money transfer credit card to transfer a balance within a set number of days – this could be within 60 days of receiving your card – to activate the 0% deal.
Once the interest-free period is over the rate will be then be much higher.
Using your money transfer credit card to make a purchase
You can still use your money transfer credit card to spend and make purchases. You might be offered a low interest rate for making purchases for a set period – and this can be at a 0% interest rate – but this will depend on the card deal, your financial situation and credit history.
If you used your money transfer credit card to make purchases then you would be covered by credit card protection.
It’s important to remember that the low interest rate offered for credit card purchases can be offered for a shorter time period than the low interest rate for money and balance transfers.
Once the interest-free period is over the rate will be then be much higher.
Things to be aware of when considering a money transfer credit card
Some things to be aware of when you’re considering applying for a money transfer credit card include:
- Interest rates will rise after any 0% deal periods, and will be at a much higher rate. If you have any money you still need to pay off then you’ll start paying much higher interest rates
- The 0% interest rate offered on your money and balance transfers may be for a different time period to any 0% interest rate on purchases
- You will have to pay a set fee to transfer money or a balance
- There will be fees to pay for any late payments and going over your credit limit
- The card provider can take away the 0% offer if you don’t meet your minimum monthly repayments or you go over your credit limit
- You will usually have to use the card to transfer money or a balance within a set period to access the offer – this could be within 60 days of receiving the card
- If you use your money transfer credit card to transfer money to your current account to make a cash or debit card purchase, your purchase won’t have the same level of credit card protection you have when making a purchase on a credit card
The interest rate and credit limit you’re offered on your money transfer card and whether or not you’re accepted for a card will depend on your credit history and financial situation
Alternatives to a money transfer card
If you’re finding it difficult to be approved for a money transfer credit card then you might want to consider other finance options:
- Low rate or 0% purchase credit card: a low rate purchase credit card or a 0% purchase credit card could offer you lower interest rates for a longer period than the 0% interest rate for purchases on a money transfer credit cards. You will also have credit card protection if you use your purchase credit card to spend
- Loan: a money transfer card can offer lower interest rates than a loan. But if you aren’t able to pay back the money you’ve borrowed by the end of the low rate deal then you will have to pay high interest rates. A loan can offer better interest rates if you’re looking to borrow for a longer term
- Overdraft on your current account: if you’re looking to borrow a small amount of money for a short period then a current account with an overdraft can be a better option. It can also be easier to be approved for an overdraft than a credit card
Comparing money transfer cards
Comparing money transfer cards can help you find the best card for you. We show you a list of money transfer credit cards with the longest money transfer offer available.
You can then compare cards by the 0% balance transfer deal duration, the interest rate charged after this period, and the balance transfer fee you have to pay. You’ll also be able to see the interest rate charged when you use your money transfer card to make purchases and any deal periods.
Click into the product details to then see money transfer fees and any other fees associated with that card.
It’s important to remember that the money transfer card listing we show doesn’t take into account your financial situation and borrowing history. Click the eligibility checker on a card deal listing to then see the likelihood of you being approved for the card.
Using the eligibility checker runs a soft search on your credit history and won’t affect your credit score.
