What Are Money Transfer Credit Cards?
The best money transfer credit cards let you do exactly that, transfer money from the credit card straight into your bank account. They are also called cash advance cards and will allow you to move money over without making a specific purchase, leaving the money in your account to be used for whatever you want. This could be for a large item or to pay off a loan or other credit card if those repayments are subject to interest. The benefit of these cards being that an agreement will be in place not to charge interest on the balance for a set period of time.
How Do They Work?
These credit cards generally offer a transfer of cash at a favourable or zero percent interest rate for a set period of time. This means that you can move the cash to wherever you want it, for whatever purpose, and pay it back monthly. If you have been offered a zero percent interest rate this can work out more cheaply than getting a loan, and you can use it to pay off an overdraft or for paying for something that you can’t put on your credit card.
Advantages and Disadvantages of the Best Money Transfer Credit Cards
Although you won’t be charged interest on the repayments if you transfer money to your bank account, you have to remember a few things. Firstly, you must pay off the minimum amount every month or you are in danger of losing the ability to pay back the balance interest free. Secondly, make sure the whole balance is paid off before the end of the interest-free period. And lastly, although you won’t pay extra on the money transferred if you keep to the above points, you will be charged an initial payment as a fee for being able to borrow the money interest free. This fee will generally be less than 5%, and if you can pay back the balance before the end of the interest free period, this can work out less than it would cost to take out a loan.
Using one of these cards is not the same as just withdrawing cash from the credit card to pay for purchases or to pay off loans, as that will cause you to be charged extra fees and interest. In this specific case, you may be charged a fee for the withdrawal as well as interest being charged on the amount, even if you pay it back in full when you get your statement. This withdrawal of cash is usually known as a cash advance and interest will be charged from the moment of withdrawal. The worst part is, this is usually even higher than the normal APR for credit card purchases. So make sure if you are going to move cash to a bank account that you are doing it with an agreed money transfer card and not a standard credit card.
How to Find a Money Transfer Credit Card
If you are interested in finding the best money transfer credit cards, you should come to us at Bonsai Finance. Our online application process is very easy to complete, and we have access to many different credit card providers that can suggest cards for you that have excellent terms and low interest rates or fees. If you need to pay off some other debts or make a purchase, then an interest-free money transfer card is the way to accomplish it. As long as you remember to pay off the balance by the end of the interest-free period, it can be the most economical option for you. Call us today to see how we can help.