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Last updated October 2020
A money transfer credit card allows you to transfer money into your current account from your credit card. This lets you withdraw cash or pay off overdrafts and is a much more cost-effective method compared to withdrawing cash from the credit card directly.
A money transfer card will move cash directly to your current account from your credit card. This money is taken out as credit which means it must be repaid like any other credit card spend.
Typically, moving money from your credit card to your current account comes with fees and interest rates attached. However, with a 0% money transfer card, you can benefit from 0% interest rates. You will usually still have to pay a money transfer fee, which is usually about 2-4% of the amount you transfer.
Remember: Always use your savings or money from your income first before taking on debt. If you are struggling with debt, you can get free debt advice and support from Stepchange.
If you need to withdraw cash from your credit card, a 0% money transfer credit card is ideal. This is a far cheaper way of doing it than withdrawing cash from the credit card directly. Here are some of the other advantages of a money transfer card.
The cost of taking money out of your credit card balance is the main thing to think about. You will have to calculate whether the costs are worth it. Here are some of the main disadvantages of a money transfer card.
We have listed out some frequently asked money transfer card questions.
Yes. These credit cards are designed to let you transfer money from your credit card into your own current account.
There are pros and cons of a money transfer card. The main things to think about are the costs and whether you can repay the balance back on time. The best way to use a money transfer credit card is to avoid the interest rate.
If you know you won’t be able to pay off the balance on time, you will have to compare the interest plus transfer fees with the fees of taking out a personal loan to see which is the best option. Even with the interest rates, a money transfer credit card could be a cheaper way of getting cash than a loan. However, it’s best to do some research on this first.
A money transfer card does have some advantages over a personal loan. It’s possible to get access to money interest-free if you have a 0% interest card. This means you will be saving on interest and you will only have the money transfer fee to pay. In comparison, a personal loan will typically have much higher interest rates than the money transfer fee will cost.
As you are taking money from your credit card balance, it still counts as using credit. This means that it will affect your credit rating one way or the other.
If you use a money transfer card responsibly, taking out credit in this way could be a positive way of building your credit rating. However, if you miss payments or make just the minimum repayments each month, this can harm your credit history.