If you want to transfer money from a credit card to your debit card, you should get a money transfer card. You will need it when you have to buy an item and don’t have the money to pay for it in cash.
A money transfer card is also useful if you have an overdraft. Usually, a balance transfer credit card is the primary option because you can pay off your debts from a previous credit card at 0% interest.
The difference between a money transfer card and a balance transfer credit card is that you cannot initiate a transfer of money with the latter.
Can you get the same 0% interest option with a money transfer card? Yes. Most card issuers will grant you an extended period to pay off the debt at 0% interest as long as you pay off the money transfer fee.
When you pay an overdraft, the rate of interest is usually higher. Thus, using a money transfer card will be the better option for settling the debt.
A money transfer card can also be used to secure a loan. Planning to buy a car? You can’t pay for the car with a credit card. But with a money transfer card, you will have the facility to apply for a car loan.
Table of Contents
- 1 Planning To Transfer Money From Your Credit Card To Your Bank Account? Read On!
- 2 Be aware of before using the cash advance facility of your credit card:
- 6 Which Money Transfer Card Should You Choose?
- 7 How To Use Your Money Transfer Card
- 8 3 tips before finalizing your decision to use a money transfer card:
Planning To Transfer Money From Your Credit Card To Your Bank Account? Read On!
Is it still possible to transfer money from your credit card to your bank account even if you don’t have a money transfer card?
Yes! All you have to do is to avail of the cash advance facility that is a feature of your credit card.
Before anything else, there is a trade-off for having immediate access to ready money. The interest charged on the cash advance facility is usually much higher.
The moment you avail of the cash advance, the meter will start running. You will be charged interest right away. These charges will continue and accumulate until you completely settle the amount of the cash advance.
Every time you withdraw cash through your credit card, you will be charged interest automatically.
Be aware of before using the cash advance facility of your credit card:
Once you withdraw cash, the Annual Percentage Rate or APR starts moving. Keep in mind that you will be charged interest every day that the cash advance is not fully paid. Accordingly, estimates have the APR fluctuating between 20 percent and 30 percent.
The credit card company will also levy interest charges if you use the card to exchange foreign currency.
For these reasons, while you can use the credit card to transfer money to your bank account, the money transfer card remains your best option.
Which Money Transfer Card Should You Choose?
If you are convinced that the money transfer card is the best option for transferring money to your bank account, then you may want to consider uSwitch.
When choosing among money transfer cards, select the one that can offer the longest term for its 0% interest payment plan. You should also find out what the other transaction charges are.
It might be a long shot to get the best of both worlds. In practice, if you want lower total charges, you can get them only with money transfer cards that offer the shortest 0% interest payment periods.
In this case, if you are confident of paying the loan back faster, go for the money transfer card that has a shorter 0% interest payment period.
How To Use Your Money Transfer Card
Once you transfer money from your credit card to your bank account using a money transfer card, the rest is easy. You can withdraw the money that you transferred using an ATM. You will not be charged fees for the withdrawal. Also, you can spend the amount using your debit card.
The amount you pay for using the money transfer card will depend on the amount you borrowed and the rate of the credit card fee.
Let’s say you borrowed GBP5,000 which carries an interest rate of 5%.
GBP5,000 x 0.05 = GBP250; Money transfer fee
GBP5,000 + GBP250 = GBP5,250; Total payment
Of course, you have the option to pay only the minimum payment that is stated in your account statement.
It would be advisable to pay off the entire amount while you are still in the 0% interest payment period. If not, the card company will compute the total payment charges based on interest rates that will be much higher.
Read These Helpful Tips Before Transferring Money To Your Bank Account
As the saying goes, “If something is too good to be true, it probably is.” Using a money transfer card is the smart way of transferring money from a credit card to a bank account.
However, these services or facilities are not free. They will carry charges, fees, as well as penalties.
3 tips before finalizing your decision to use a money transfer card:
1. Before using the money transfer card to pay off loans including home amortizations, check first if you will be penalized by opting for earlier repayment. Some lenders will charge you penalties for settling your obligation earlier than expected.
2. Confirm first if the money transfer card includes a 0% interest payment plan. Find out if you can pay the amount in full in one month.
3. You might want to consider opting for a facility called “Overdraft with a Current Account”. Some providers will include a 0% interest payment plan but without a minimum monthly payment.
Always do your research before availing of any loan and money transfer facility. These services will always entail charges. You want to make sure you don’t pay more than what other service providers are charging.