0% money transfer credit cards explained

Rachel Wait
·6-min read
 (Pexels)
(Pexels)

Money transfer cards allow you to shift money directly into your bank account from the spending limit you are issued with. You then repay the amount borrowed to your credit card provider in monthly installments, just as you would with any other type of credit card.

Once you’ve carried out the transfer, you can use the funds how you like – whether that’s to pay off an expensive overdraft, or as a low-cost loan to buy a new car or other major purchase.

You’ll usually need to pay a fee that’s charged as a percentage of the amount transferred – typically between 2% and 4%. So if you transferred £3,000, a cost of £60 to £120 would be added to your card balance.

What are the best 0% money transfer cards?

If one of these cards sounds right for you, how do you go about getting the best one?

At ES Money, we carried out some research (April 2021) and have listed the best deals we found below.

A word of warning however: acceptance for these cards requires a robust credit score, so not all applicants will qualify. You can assess your chances of being accepted for a card without disrupting your credit score by using an eligibility checker.

We have ranked these cards simply by 0% duration on money transfers. But note that, while details were correct at the time of writing, deals can change.

1. MBNA Long 0% Money Transfer Card

0% duration: 18 months

Transfer fee: 2.99%

Rep. APR: 22.9% (variable)

Why we chose it: At 18 months, this card from MBNA offers the longest interest-free period on money transfers currently available.

Providing you stay within 93% of your allocated credit limit, you can make as many money transfers as you need (at minimum 14-day intervals) within the first 60 days and avoid paying interest on the debt for the 18-month period.

You will be charged a 2.99% fee each time, however.

The card also comes with 12 months interest-free on other credit card balances transferred to the card, for a higher 4% fee (note, that neither money or balance transfers, can be made from other MBNA accounts).

Some applicants may also be offered a higher fee or shorter 0% period.

2. Tesco All Round 15/15 Card

0% duration: 15 months

Transfer fee: 3.99%

Rep. APR: 19.9% (variable)

Why we chose it: While MBNA beats this card for 0% duration and fee, Tesco Bank’s money transfer card comes with some other perks. For example, you will have almost three months (90 days) from opening the account to qualify for the 0% interest on the money transfers, which can total up to 95% of your total credit allocated.

You can also earn Tesco Clubcard points faster on shopping in, or outside, the store.

Interest-free balance transfers from other card providers are also available for 15 months for a relatively low 1.99% fee, while the card offers the same interest-free period on new purchases too.

On the downside, applicants with lower credit scores and incomes might only be offered 12 or even nine months interest-free.

3. Virgin 19-Month All Round Credit Card

0% duration: 12 months

Transfer fee: 4%

Rep. APR: 21.9% (variable)

Why we chose it: This money transfer card from Virgin Money offers a year’s 0% interest on borrowed cash for a 4% fee. But, unlike the other cards, this term is guaranteed if you are accepted.

While a strong contender for money transfers, the card is most attractive for interest-free balance transfers (2.9% fee) and purchases, both of which offer 19 months at 0% as the card’s name suggests.

The card also doubles as a pass to Virgin customer lounges.

Money transfers need to be made within the first 60 days of opening the card to qualify for the 0% deal.

*If you are looking for a 0% money transfer card and have existing card debt, Virgin’ Money’s 29-Month All Round Credit Card could be a better option. It offers the same 12 months at 0% on money transfers (same 4% fee) but 29 months on balance transfers (3% fee) and three months at 0% on purchases.

Frequently asked questions: 0% money transfer cards

Find out more about these deals below.

How much interest is charged?

The most competitive money transfer credit cards charge zero interest for the first set number of months. This is good news, as it means all of your monthly repayments go towards paying off the debt rather than the interest.

Once the 0% window ends, interest of at least 20% APR will apply however, so it’s important to pay off your balance in time.

Do all money transfer cards charge fees?

In the majority of cases, you will have to pay a transfer fee. Deals change regularly but from time to time, you might find some cards that charge a low fee, or even no fee at all. However, these will carry shorter 0% periods.

How much money can I transfer?

The amount of cash you’ll be able to transfer into your current account from a money transfer card is based on a percentage of your overall credit limit – it’s typically between 90% and 95%.

So, if your allocated card limit is £4,000, you could expect between £3,600 and £3,800 to be paid into your bank account.

Minimum transfer amounts of around £100 usually apply.

Can I make more than one transfer?

You can carry out more than one transfer but, unless the card comes without a fee, it will cost you each time you do so.

And if you do it outside the permitted transfer window (usually 30, 60 or sometimes 90 days from opening the account) you’ll probably also lose the 0% interest, or ‘fee-free’ promotional offer.

How should I use a money transfer card?

Money transfer cards are great when used to your advantage. But if you start racking up interest, any benefits could quickly be lost.

To get the most out of your card, calculate how much you’ll need to pay each month to clear the balance before the 0% deal ends. Then set up a direct debit for this amount, so you don’t have to think about it again.

If you can’t afford to do this, try to pay more than the minimum – more on this below.

What should I watch out for?

When comparing money transfer credit cards, factor in the following:

The go-to APR: if things go to plan you will never pay the APR which kicks in after the 0% window, but it pays to be aware of what it is. Also bear in mind that the APR you see advertised is only representative, which means it needs to be offered to 51% of successful applicants. Yours could be higher.

Minimum monthly repayments: these are typically set at low levels – around 1% to 2.5% of the balance – but always try to pay more than this. Paying just the minimum each month will rack up interest and it will take years on end to clear your debt

Eligibility: the most competitive 0% money transfer credit cards are reserved for applicants with excellent credit scores. If yours isn’t up to scratch you could be offered a shorter 0% deal, a higher transfer fee or even be turned down entirely. Card providers with eligibility checkers allow you to see your chances of being accepted before you actually apply.