A money transfer card allows you to transfer money from your credit card to your debit card. This is particularly useful if you have an overdraft or if you need some cash to make a purchase you cannot afford at the moment read on to find out how…
Normally if have acquired debts from another card, you can use a balance transfer card to pay them off at zero percent interest. However, with a balance transfer, you cannot move money to your CC.
This arrangement may financially work out better for you compared to paying the debt at the current rate of interest. The benefit is more apparent when dealing with an overdraft where the rate of interest charged is usually quite higher.
Table Of Contents
- 1 Transferring Funds From Your Credit Card To Your Bank Checking Account
- 2 Choosing the Best Money Transfer Credit Card
- 3 Using A Money Transfer Card
- 4 Helpful Tips Before Transferring
- 5 Are There Other Options To Money Transfer Credit Cards?
- 6 How Does The Money Transfer Card Work?
- 7 5 Easy Steps On How To Apply Online For Your Money Transfer Card
Transferring Funds From Your Credit Card To Your Bank Checking Account
What if you don’t have a money transfer card? Can you use your credit card to move money to your bank checking account? The answer is “Yes”. You can do this by using a cash advance which is a ready facility.
There will be a trade-off between convenience and the interest amount payable as a cash advance comes with a hefty price tag. Put simply, a cash advance is an expensive way to avail of ready funding.
Once you get a cash advance, the card provider will charge you interest from Day 1. Interest charges will continue until the time the cash advance is settled in full. Similarly, the credit card provider will levy interest charges whenever you withdraw cash through your card.
Adding The Cash From Credit Card To Debit Card
Let’s say you withdrew from an Automated Teller Machine (ATM) using your card. The credit card provider will charge you a 2% fee for the ATM transaction.
Another thing you have to keep in mind is that when you use the cash advance facility, its APR or Annual Percentage Rate goes into effect. You will be charged every single day until the amount of the cash advance is fully paid back. On average, the APR is between 20% and 30%.
What other transactions will incur charges or fees? The issuing company will apply interest charges and fees whenever you exchange foreign currency at a Forex Center or when using tokens at a casino.
To avoid all of these transaction fees and get the money you need to be transferred from your credit card to your bank account, the money transfer card remains the best solution.
Choosing the Best Money Transfer Credit Card
Likewise, if you are planning to get a loan to acquire an item that you wouldn’t be able to purchase with your card such as a car, a money transfer card would be the smarter, more cash flow-friendly option.
Your best option would be to select the card that offers the longest zero percent interest payment plan together with the lowest charges for money transfer.
Generally, the total charges for money movement are lower for money transfer cards that have shorter zero interest payment plans.
Thus, if you believe you can pay back the loan or the advance faster, it might be a better and cheaper option to get the card that offers a shorter zero interest period and lower charges.
Using A Money Transfer Card
Transferring money from your credit card to your bank checking account is easy when you have a money transfer card. The money that is sgifted to your bank account can be withdrawn from an ATM without any charges or fees. You can also spend it through your debit card.
Amount Of Money You Transfer Matters
How much will you end up paying if you use your money transfer card? The computation shall be based on the amount of money that you borrowed. On top of that, you will be charged a credit card fee.
As an example, let’s assume you borrowed £6,000 that carries a 4% fee. The total amount payable on the money transfer shall be calculated as follows:
£6,000 x 0.04 = £240 (Money transfer fee)
£6,000 + £240 = £6,240 (Total payment)
You can pay the minimum monthly payment which shall be indicated in your statement until the full amount is completely settled.
It would be a good idea to pay more than the minimum monthly payment and settle the entire amount while you are within the zero percent interest period. Otherwise, if the period expires, the money transfer card will calculate your balance based on higher interest rates.
Helpful Tips Before Transferring
Are you using your card to cover loan payments or housing amortizations? It would be a good idea to check if you are being charged penalties for early repayment.
Why does this happen? You may think that it is a good idea to pay off larger amounts of the monthly loan so you can settle the obligation right away. However, there are money lenders who have a money payment schedule that they want borrowers to follow.
You may not be aware that you will be charged a penalty for settling your loan earlier than the agreed-upon term.
Before using your card, make sure it has an accommodation for a zero interest payment period. Likewise, check with the card provider if you can settle the full amount in a month.
Are There Other Options To Money Transfer Credit Cards?
Yes, and it is called an overdraft on your current account. This facility can also offer limited interest-free periods and may not include a minimum monthly payment.
Your decision on whether to avail of this facility or not will depend on the amount of money that you plan to borrow. Keep in mind that the portion of the overdraft which is free of interest is not as generous as the credit limits offered on money transfer cards.
As usual, take the time to do some research on overdraft charges to make sure you are not paying exorbitant amounts.
How Does The Money Transfer Card Work?
Need cash to clear overdraft or settle urgent financial obligations? Money Transfer Card can tide you over when you fall short of cash. Instead of borrowing funds from a bank, you get a cash loan straight from your Money Transfer card provider. This type of card is a credit card that you can borrow at a 0% interest arrangement for a set or limited period. Once your credit application gets approved, cash will be transferred directly to your bank account.
How to Manage Your Money Transfer Card
Always keep in mind that you are borrowing money through your MTC, so make sure to use it only when necessary. It is best to pay back your loan within the 0% grace period so you can steer clear of accumulating charges.
Never skip a due date or you’ll lose the 0% rate and incur penalty charges. Refrain from getting multiple balance transfers so you won’t end up knee-deep in debt and with poor credit rating.
Avoid using your money transfer card to shop or withdraw cash so you won’t be charged higher fees and interests. Dedicate the card solely to money transfer. Remember, to use it only when you are in dire need to free up some cash.
If you need a bigger amount of cash to cover your debts, consider other loan options such as getting a personal loan. The payment scheme and interests may turn out to be more feasible.
5 Easy Steps On How To Apply Online For Your Money Transfer Card
- Log in to your Online banking account or Card App
- Click “money transfer” or “transfer money to my bank account”
- Fill in the required transaction details
- Upon approval, you will receive a personalized credit limit which is based on your income and credit history. The limit is usually at 90%-95% of your available credit limit.
- The money will then be credited to your account