You can repay a loan or overdraft by moving money from a credit card to your bank account. You'll then owe the credit card provider rather than the loan lender or bank.
A money transfer lets you move money from your credit card to your bank account.
You can use a money transfer credit card to pay off debt or borrow money for a purchase.
With a 0% deal, you can repay what you owe without paying any interest. Always compare money transfer credit cards before you apply.
You could use a money transfer to:
Pay off an overdraft, personal loan or payday loan
Fund a large purchase, like buying a new car
Providers charge a money transfer fee when you complete a money transfer. It can be up to 4% of the balance you are transferring.
For example, if you want to transfer £2,000 and there's a 3% balance transfer fee, the fee would be £60. This would make your credit card balance £2,060.
The interest you pay in addition to a money transfer fee depends on whether or not you have a 0% deal.
If you have a 0% deal, you will not pay any interest on the amount you transfer until the deal ends.
If you do not have a 0% deal, the card provider will charge you APR. APR is the annual percentage rate and is the interest charge on your balance.
Your credit limit can also affect your money transfer.
To pay off the balance in full without paying interest, you'll need a 0% money transfer card. The length of the 0% deal needs to give you enough time to completely clear the debt.
For example, if you had a balance of £5,400 to clear over 36 months, you'd need to pay £150 per month to clear the debt in time.
The shorter the 0% deal, the higher your monthly repayments will be. Make sure you choose a credit card that offers a long enough 0% period so you can afford the monthly repayments.