Paying cash straight to your current account can be seamlessly easy through money transfer credit card. Some can even charge you with 0% interest on the cash you transferred for a set period. Read this guide to learn more about how money transfer credit card works.
What Is Money Transfer Credit Card?
A money transfer credit card is a type f credit card that allows you to transfer money straight to your current account. It works the same way as your balance transfer cards. However, instead of transferring the outstanding balance between credit cards, the transfer goes to your bank account.
How Does It Work?
If you have a money transfer credit card, you’ll have the liberty to transfer cash from your credit card to your current account. The costs for processing the transfer is paid over an agreed period, which could be more than two years.
This process works like an interest-free cash loan using a money transfer credit card. You also have to pay for the money transfer transaction which is known as the money transfer fee.
What Are The Benefits Of Money Transfer Credit Card?
Money transfer credit cards are useful in paying off your overdrafts or loan due to its 0% interest over a fixed period. This means if you’re working out on how you can settle your overdrafts, this type of credit card will work on your favour.
Besides, you can also use it in paying for large purchases that you can’t place in your credit card.
How Can I Find A Money Transfer Card?
A standard credit card does not allow you to transfer money to your bank account unless it’s a special money transfer cards. Also, standard credit cards will charge you with sky-high interest when paying it off. Unlike a 0% money transfer card, you don’t have to pay for interest over a set period.
How Much Does A 0% Transfer Card Cost?
You do not have to pay interest on a 0% transfer card unless when the period ends and your outstanding balance remains unsettled. However, you have to pay for fees in processing the transaction to transfer the money to your bank account. This can cost approximately 2%-4% of the amount you initiated to transfer.
For instance, if the transfer fee costs 3% on a £2,000 transfer, it will cost you £60. If the interest -free period is adequate for you to pay off the entire amount, you could possibly get a lesser fee on these charges.
Keep in mind that a money transfer credit card is a type of credit card; hence, they can have similar charges as well. We’ve created a guide for you to help you understand credit card charges even more.
Is Money Transferred Credit Card Right For Me?
Should it crossed your mind to consider getting this type of card, you must try to weigh your options and determine if it suits you best.
To help you decide whether it fits you, scrutinize the following factors when comparing money transfer credit card:
Interest Free Period
Check on the length of interest-free period and try to compare which one gives you more time to pay off your balance. You have to ensure that you can afford paying for the amount before the agreed 0% period ends.
Money Transfer Fee
You should consider checking the fees for transferring money to your bank account. The usual fees tat you ca get ranges between 2% to 4% of the amount transferred.
Time Frame For Transfers
Several money transfers necessitate you to make a transfer within 60 days of the receipt of the card. If you failed to comply, you could be at risks of losing the 0% introductory rates.
Fees or Charges
When choosing the right card, you have to consider confirming the fees for transactions and terms. This include charges for transactions outside the UK. You can check on the charges for exceeding credit limit, or fees for foreign usage.
How long will the transfer take?
The duration of when the funds are transferred will depend on the provider. Some providers initiate an instant transfer while others will take a few days.
Does my credit rating matter?
Lenders or creditors are to conduct a credit check to decide whether to approved or decline your application. They’ll assess your credit limit based on your creditworthiness as well.
Is withdrawing it in cash much better?
You should not withdraw cash by credit card since this can cost a lot. Check our guide on credit card charges.
Is there a limit for my transfer?
Yes, most providers allow you around 60 days from the date you receive the card to set up the money transfer.