Money Transfer Credit Cards UK: Costs Compared

How a money transfer card works

A money transfer card lets you move part of the credit limit into your bank account as cash, according to MoneyHelper. The cash lands in your current account, so it can be used to clear an overdraft or other borrowing. The amount you can move is not the full limit: transfers are usually capped at around 90% of the credit limit. On a card with a £3,000 limit, that 90% cap means a maximum transfer of about £2,700. The remaining 10%, about £300, stays as available credit and is not transferred.

The transfer is not free. Money transfer fees are often up to 4% of the amount transferred. On a £2,000 transfer, a 4% fee is £80, charged upfront. That £80 is added to the card balance, so the debt starts at £2,080 rather than £2,000. Interest at the standard rate applies to anything left after the 0% period ends, and to any spending on the card. The minimum monthly repayment must be paid to avoid fees and penalties. A money transfer card is therefore a borrowing tool with a fixed entry cost and a deadline attached to the 0% period.

The 90% limit and the fee

The 90% cap and the 4% fee are the two numbers that decide whether a money transfer card works for a specific debt. The cap sets the maximum cash you can move: around 90% of the credit limit. The fee sets the upfront cost: often up to 4% of the amount transferred. On a £1,000 transfer, a 4% fee is £40. On a £2,000 transfer, it is £80. On a £2,700 transfer, it is £108. The fee is charged when the transfer is made, not spread across the 0% period.

The 90% cap also means the card cannot clear a debt larger than about 90% of its limit. If the overdraft is £2,500 and the card limit is £2,000, the maximum transfer is about £1,800, leaving £700 of the overdraft in place. That remaining £700 continues to attract the overdraft rate. The fee and the cap therefore work together: the fee is a known upfront cost, while the cap is a hard ceiling on how much borrowing can be moved. Both figures come from the same source, MoneyHelper, and both apply before any interest is considered.

Money transfer versus overdraft versus personal loan

The comparison uses Bank of England average rates and an illustrative £2,000 balance. In an interest-charging overdraft at 20.27%, £2,000 costs about £405 a year. On a money transfer card with a 4% fee, the same £2,000 costs £80 upfront. A personal loan at the 9.96% average rate costs about £199 in interest over a year on the full amount. The overdraft is the most expensive of the three on these figures, at about £405. The personal loan sits in the middle at about £199. The money transfer card has the lowest stated upfront cost at £80, but that £80 buys a 0% period, not a permanent rate.

The table compares a yearly overdraft cost, a yearly loan interest cost and a one-off card fee. The card figure is not a yearly cost, so it is not directly equivalent to the other two. The overdraft figure of about £405 and the loan figure of about £199 both cover a full year on the full £2,000. The card figure of £80 covers the transfer only. Interest at the standard rate applies to anything left after the 0% period ends, and to any spending on the card, so the card cost can rise after the 0% period.

What happens after the 0% period

Interest at the standard rate applies to anything left after the 0% period ends, and to any spending on the card. The Bank of England Money and Credit, August 2026 (published 29 September 2026), puts the effective interest rate on interest-charging credit card balances at 21.55%, up from 21.45% in July. That 21.55% is the relevant benchmark for a card balance that is still outstanding once the 0% period finishes. On a £2,000 balance left at that rate, the yearly interest would be in the same territory as the overdraft figure of about £405, because 21.55% is close to the 20.27% overdraft rate.

The 0% period is therefore a window, not a settlement. If the £2,000 transferred is not cleared by the end of that window, the remaining balance moves to the standard rate. The £80 fee has already been paid, so the total cost becomes £80 plus interest at the standard rate on whatever is left. The effective rate on new personal loans was 9.96% and on interest-charging overdrafts 20.27%, so a card balance left after the 0% period at 21.55% is more expensive per year than the personal loan average and slightly above the overdraft average. The deadline is the whole point of the comparison.

Repayments and penalties

The minimum monthly repayment must be paid to avoid fees and penalties. That requirement applies during the 0% period as well as after it. Missing the minimum can trigger fees and penalties and can also affect the 0% period itself. The minimum is not designed to clear the balance quickly: on a £2,080 balance after a £80 fee on a £2,000 transfer, minimum payments mostly cover the required amount rather than reducing the debt fast. The FCA persistent debt rules (in force from 1 March 2018) add a further step: after 18 months in persistent debt, card firms must contact customers to encourage higher repayments.

Persistent debt means paying more in interest, fees and charges than in principal over 18 months. A cardholder who pays only the minimum on a £2,080 balance can reach that point. The firm must then contact the customer to encourage higher repayments. That contact is a rule, not a suggestion, and it applies from 1 March 2018. The minimum monthly repayment must be paid to avoid fees and penalties, but paying only the minimum for 18 months can trigger the persistent debt process. The two rules sit together: one sets the floor for each month, the other sets a checkpoint at 18 months.

When a money transfer costs more

A money transfer card costs more than the alternatives when the balance is not cleared before the 0% period ends. The £80 fee on £2,000 is fixed, but interest at the standard rate applies to anything left after the 0% period ends. At the August 2026 effective rate of 21.55% on interest-charging credit card balances, a remaining £2,000 would cost more per year than the personal loan average of 9.96% and slightly more than the overdraft average of 20.27%. The £80 upfront fee is then added to that interest, so the total exceeds the £80 headline.

The 90% cap can also make the card cost more in a different way. If the debt is larger than about 90% of the credit limit, part of the debt stays where it is. On a £2,500 overdraft and a £2,000 limit, the maximum transfer is about £1,800, leaving £700 at the overdraft rate of 20.27%. That £700 costs about £142 a year on its own, on top of the £72 fee on the £1,800 transfer. The card has moved most of the debt but not all of it, so two costs run at once. The 4% fee and the 90% cap together decide whether the card is cheaper or more expensive than leaving the debt alone.

Source: MoneyHelper.

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Frequently asked questions

How much can I transfer to my bank account with a money transfer card?

Transfers are usually capped at around 90% of the credit limit. On a £3,000 limit, that is about £2,700. The remaining 10%, about £300, stays as available credit.

What fee applies to a money transfer?

Money transfer fees are often up to 4% of the amount transferred. On £2,000, a 4% fee is £80, charged upfront and added to the card balance.

Is a money transfer card cheaper than an overdraft?

On the illustrative £2,000 figures, a 4% fee costs £80 upfront, while an interest-charging overdraft at 20.27% costs about £405 a year. The card is cheaper only if the balance is cleared before the 0% period ends.

What interest applies after the 0% period ends?

Interest at the standard rate applies to anything left after the 0% period ends, and to any spending on the card. The effective rate on interest-charging credit card balances was 21.55% in August 2026, up from 21.45% in July.

What happens if I only pay the minimum for 18 months?

Under the FCA persistent debt rules in force from 1 March 2018, after 18 months in persistent debt card firms must contact customers to encourage higher repayments. The minimum monthly repayment must be paid to avoid fees and penalties.