By Clare Yates
6 min read
You might use money transfers to cover bills when there isn’t the option to pay by card, to clear an overdraft, or pay someone back if you owe them some money. It’s a flexible feature, but it does come with costs.
Before deciding whether a money transfer is right for you, it’s worth understanding how it works and weighing up the pros and cons. Here’s a quick guide to help you decide if this option could work for you.
How money transfers work
A money transfer is a bit like a cash advance, but instead of withdrawing physical notes from an ATM, the money goes straight into your current account. You usually set it up through your online banking or credit card app.
The process is simple: choose the transfer option, enter your bank account details, select the amount you’d like to move, and confirm.
Once you’ve approved the transfer, the money will land in your account. Timing depends on the provider – some complete transfers on the same day, while others may take a few working days.
How to transfer money from a credit card to a bank account
When it comes to transferring money from a credit card to a bank account online, the process can be quite simple. The steps may vary by provider, but it often looks like this:
Log in to your account: Either through your provider’s website, mobile app or by calling their customer service line.
Select “money transfer”: Look for the option to move funds from your credit card into your current account.
Enter your bank details: Provide the account number and sort code for where you want the money to go.
Confirm the amount: Decide how much you want to transfer, making sure it’s within your credit limit.
Check costs: Review any transfer fees and interest charges before finalising.
Complete the transfer: The money may arrive within a few working days, though some providers may offer same-day transfers. Do check first if this comes with an extra fee.
What are the costs involved in a money transfer?
The cost of transferring money from a credit card depends on your card’s terms. For most people, the main things to watch out for are the one-off fee and the interest charged on the transferred amount:
Transfer fee: Providers typically charge between 3% and 5% of the amount you move. That might not feel too bad on a small transfer, but if you’re moving hundreds or even thousands of pounds, the fee can quickly stack up.
Interest rate: Unless your card has a promotional 0% deal, you will also pay interest on the amount transferred.
Should you transfer money from your credit card?
Like any financial decision, transferring money from a credit card isn’t something to do without weighing up your options first. It can be useful in certain situations, but there are a few additional things to think about.
Limits on transfer amounts: Providers set a minimum amount, for example £100. On the other hand, your maximum will usually be tied to your credit and any existing balance on your card, and you can’t normally move the full balance.
Credit card charges: Staying under your limit and keeping up with your repayments is essential. Otherwise, you could face penalties on top of the transfer fee and interest, which makes the whole exercise more expensive than it’s worth.
Can a credit card money transfer affect my credit score?
The transfer itself won’t appear as a separate item on your credit report. If you use a money transfer sensibly and keep up with your repayments, it shouldn’t harm your score.
However, there are risks. If you borrow more than you can realistically repay and start missing payments, your credit history will take a hit. Going over your card limit can also damage your score. Even if you pay on time, relying on money transfers to juggle debts might give lenders the impression that you’re under financial strain, which could make it harder to borrow in the future.
It’s also worth thinking about how you’re using the transfer. Taking on more debt to pay off an overdraft, for example, can sometimes be a warning sign to lenders that you’re struggling to manage your finances. If this feels familiar, it may be worth exploring other options, such as cutting down on overdraft use or looking into consolidation products.
Pros and cons of transferring money from a credit card
There are definite advantages to money transfers, but also some potential drawbacks.
Quick access to cash: If you need funds urgently, a money transfer is often faster and easier than arranging a personal loan.
Debt repayment option: Some people use a 0% money transfer deal to clear an expensive overdraft or payday loan, replacing it with a cheaper form of borrowing.
High fees on larger sums: A 3–5% transfer fee can feel small on a few hundred pounds but becomes significant if you’re moving thousands.
Interest can add up: Without a 0% period, the interest charged may make the transfer expensive, especially if you only make minimum repayments.
Impact on credit: Using a large portion of your card limit can reduce your available credit, which might temporarily lower your credit score.
Is a money transfer the right choice for you?
Whether or not to transfer money from your credit card depends on your situation. If you can find a promotional 0% deal and have a clear plan for repaying the balance within that period, it could be a smart move.
On the other hand, if you’re already carrying significant debt or expect to repay slowly, the fees and interest could make it an expensive option. In that case, a personal loan or even speaking to your bank about reducing overdraft charges might be better.
So if you’ve been wondering, “Can I transfer money from my credit card?” the answer is yes, it is possible. Money transfers can be useful in the right circumstances, but they’re not a free fix. Weigh up the costs, check your card’s terms, and think about how quickly you can repay before making your decision.