What is a money transfer credit card?
Written by
Emily Tye
Reviewed by
Amy LancashireA money transfer credit card lets you move money from your credit card into your bank account as cash. Instead of using the card to buy something, you turn part of your credit limit into money sitting in your current account.
Many of these cards charge 0% interest for a set promotional period, but you pay a one-off fee on the amount you move, and interest applies at the standard rate once the 0% period ends.
How does a money transfer credit card work?
To use one, you first need a credit card that offers money transfers. This is usually a specific deal you apply for.
Once you have the card, you typically request the transfer through the card provider's app or online banking. You give the sort code and account number of a current account in your name, and the money is paid in as cash. It often arrives within a working day, though it can take several days depending on the provider.
From that point, the amount you moved sits on your credit card as a balance you owe, plus the transfer fee. You repay it like any other credit card balance, making at least the minimum payment each month.
There's usually a limit on how much you can move, and you typically can't transfer your whole approved credit limit. That's because the fee is added on top of the amount you move, so the provider holds some of your limit back to make sure the balance and fee still fit within it.
What does a money transfer cost?
There are two costs to weigh up.
The transfer fee. This is a one-off charge, usually a percentage of the amount you move, added to your balance straight away. For example, if you transfer £1,000 with a 3.99% fee, you’d need to pay a £39.90 transfer fee.
Interest after the 0% period. Many cards offer 0% interest for a promotional window, but the length varies a lot between cards, from a few months to over a year. Once it ends, interest applies to whatever is left at the card's standard rate, which is often high.
Here's a simplified illustration:
Say you move £2,000 to your bank account on a card with a 3% transfer fee.
You'd pay a £60 fee, so you'd owe £2,060 from day one.
On a 0% deal, that's the only cost if you clear the balance before the promotional period ends.
If you don't, the remaining balance starts building interest.
This example ignores minimum payments and any other charges, so treat it as a rough guide to the maths, not an exact quote.
Money transfer, balance transfer or cash withdrawal?
These three sound similar but do different things:
Money transfer: moves cash from your credit card into your bank account.
Balance transfer: moves existing debt from one credit card to another. It doesn't put cash in your account. Read more about what a balance transfer is and balance transfer credit cards.
Cash withdrawal: taking cash out of your credit card at an ATM. This usually charges interest immediately, with no 0% period, so it's normally the most expensive option. Here's more on withdrawing cash from a credit card.
If you're weighing up the first two specifically, we cover the difference between a money transfer and a balance transfer in more detail.
What could I use a money transfer for?
The main appeal is turning credit into usable cash, often at 0% for a while. People commonly use one to:
clear an expensive overdraft and move the debt somewhere interest-free for a period
pay someone who doesn't accept cards, such as a tradesperson or a private seller
It can be cheaper than an overdraft or a cash withdrawal if you use it carefully. But it's still borrowing, and the fee plus the risk of interest later means it isn't free money. If you can't realistically clear the balance within the 0% window, the cost can add up quickly.
The risks worth knowing before you use one
This is where money transfer cards can catch people out. The main things to watch:
You can lose the 0% rate. If you miss or make a late payment, some providers may withdraw your promotional rate and charge interest at the standard rate. Setting up a direct debit ensures you never miss the minimum.
There's a time limit to make the transfer. The promotional rate often only applies to transfers made within a set window, such as the first 60 days. Make the transfer after that and you could miss out on the 0% deal, with the card's standard money transfer rate applying instead.
You lose Section 75 protection on what you buy. When you pay for something between £100 and £30,000 directly on a credit card, Section 75 of the Consumer Credit Act 1974 makes the card provider jointly liable if something goes wrong. Spend cash from a money transfer instead and that protection doesn't apply, because you didn't buy the item with the card.
It can affect your credit. Applying for a new card usually means a hard credit check, which can dip your score for a while. And although a new card adds to your total available credit, a money transfer uses a big chunk of that limit straight away, so it tends to push your credit utilisation up rather than down. High utilisation can weigh on your score.
FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
