The best 0% money transfer credit cards

julia kukiewicz
By Julia Kukiewicz

credit cards collection©iStock.com/serts

Money transfer cards pay cash straight into a current account via a balance transfer, which can be paid back at 0% interest over several months.

But in what circumstances are these cards best used and what are the downsides to using them? We take a look in this short guide.

Before we get into the specifics though, here's a quick look at three of the best money balance cards currently on the market.

Money Transfer to Current AccountTransfer Fee
clubcard balance transferClubcard Balance Transfer0% for 40 months
3.94%
Representative example: When you spend £1,200 at a purchase rate of 18.94% p.a. (variable), your representative APR will be 18.9% APR (variable).
clubcard money transferClubcard Money Transfer0% for 40 months
3.94%
Representative example: When you spend £1,200 at a purchase rate of 18.94% p.a. (variable), your representative APR will be 18.9% APR (variable).
mbna platinum 39 month balance transferMBNA Platinum 39 Month Balance Transfer0% for 39 months
4%
Representative example: When you spend £1,200 at a purchase rate of 19.9% p.a. (variable), your representative APR will be 19.9% APR (variable).

To find more offers, go to our main comparison table here.

The best ways to use money balance credit cards

1. When paying off a high cost overdraft or loan

Just as with a standard balance transfer deal, being able to borrow cash at 0% can offer an unparalleled opportunity to repay debt.

Overdrafts

Overdrafts, especially if they're unplanned, can be as costly as a payday loans, which makes borrowing the cash to repay them at 0% extremely appealing.

For example, lets say a £500 overdraft is accruing fees amounting to £20 a month. Paying it back over time means more interest and makes the debt larger to shift in the long run.

With a money transfer card, however, the £500 can be paid back immediately and the account holder then has the 0% period to repay the balance without interest.

Even with transfer fees of £15+ the latter is a cheaper method.

There are plenty of other options for those with a high interest overdraft, however. Find out more here.

Loans

Many people often consider using a money balance transfer to pay off outstanding loans. But given the credit limits of these cards and the limited time frame for repayment, we're talking about small personal loans.

However, the interest on loans tends to be lower, meaning there's a greater risk that - taking fees into account - moving money to pay them off at 0% won't actually save that much money.

Plus loans are also likely to have terms that make it difficult to avoid interest by overpaying.

2. To make money with stoozing

Another reason to balance transfer to a current account is in order to profit from the discrepancy between interest paid by the bank and the 0% interest charged by the credit card.

This is known as stoozing, full guide here, and basically offers a chance to borrow money at 0% and let the transferred balance sit in savings and earn interest.

It's basically doing what banks do with money all the time!

Yet given the low interest rates currently offered on savings accounts it may be difficult to find a high enough rate for this trick to work, taking into account the fees for transferring.

Find more on getting a good savings rate here.

3. Borrow cash for purchases

For those thinking of splashing out on a big purchase the obvious credit card choice might be one offering 0% interest on purchases.

Money balance cards have one big advantage over these deals though - they usually come with longer interest-free promotional periods, which means cardholders have more time to pay off outstanding balances without having to worry about high APR rates.

As money balance cards entail transfer fees, the cost of these will need to be weighed against any benefit of a longer 0% interest period.

Those who can afford to pay their balance quickly may be better opting for a 0% purchase card and avoiding transfer fees. Whereas those who expect repayment will take some time will do well to escape the high standard interest rates.

Note there are now a few cards that offer longer interest-free periods on purchases, like these listed below, but they fall short of those offered by balance cards. Plus those with a less than perfect credit history may struggle to get accepted for these cards in the first place.

Post Office Money Matched credit card (Go to provider »)
post office money matched0% purchases for 30 months
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), your representative APR will be 18.9% APR (variable).
Post Office Credit Cards are provided by Bank of Ireland UK. Post Office Limited is a credit broker and not a lender.
Post Office Money Platinum credit card (Go to provider »)
post office money platinum0% purchases for 28 months
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), your representative APR will be 18.9% APR (variable).
Post Office Credit Cards are provided by Bank of Ireland UK. Post Office Limited is a credit broker and not a lender.
TSB Platinum Purchase credit card (Go to provider »)
tsb platinum purchase0% purchases for 20 months
Representative example: When you spend £1,200 at a purchase rate of 18.94% p.a. (variable), your representative APR will be 18.9% APR (variable).

For more 0% purchase deals visit here.

The downsides

As we've already seen there are a few problems with making a money transfer from a credit card to a bank account, let's look at the main ones in more detail.

1. High fees

Fees are by far the biggest problem with these cards.

Although most balance transfer cards are subject to a transfer fee, which is usually between 2 and 3%, this is slightly higher for money balance cards at around 4%.

It's not a big difference but overall it could make it more difficult to save money on high interest rates or make money through stoozing.

As money balance transfer deals have become more competitive it is possible to find cards offering lower fees, like the Virgin ones below.

Virgin Money 36 Month Money Transfer credit card (Go to provider »)
virgin money 36 month money transfer0% balance transfers for 36 mths (2.9% fee)
0% money transfers for 36 mths (2.9% fee)
Representative example: When you spend £1,200 at a purchase rate of 20.9% p.a. (variable), your representative APR will be 20.9% APR (variable).
Virgin Money All Round credit card (Go to provider »)
virgin money all round0% balance transfers for 25 mths (1.5% fee)
0% money transfers for 25 mths (2% fee)
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), your representative APR will be 18.9% APR (variable).
27 Month All Round credit card (Go to provider »)
27 month all round
% money transfers for 27 mths (2.7% fee)
Representative example: When you spend £1,200 at a purchase rate of 18.9% p.a. (variable), your representative APR will be 18.9% APR (variable).

Any such deal is likely to see a reduced 0% period as a trade off, but it might still be a cost-effective solution for those who are confident they can repay the balance within this timeframe.

This guide has more information on how fees are imposed throughout the application process.

Reduce fees with a 'purchase' payment to yourself

Those looking to move a credit card balance without paying transfer fees now have an alternative option.

We've reviewed iZettle, a personal payments system that allows consumers to make a credit card 'purchase' to themselves.

It's an intriguing alternative but on the whole the fees charged by iZettle mean this method only works out slightly cheaper.

2. Limited 0% periods

Although they are impressively long comparative to other promotional periods, the zero percent interest rate for these cards will eventually end.

Any balance outstanding after this point will become subject to standard interest rates. These are expensive and those making low repayment amounts are likely to see their balance go up rather than down.

It's therefore essential to take the time to budget repayments to ensure the balance is repaid by the end of any 0% period. And if it looks like a balance can't be repaid interest-free, it may not be worth transferring it to begin with.

Many people bank on the fact they can simply switch to a standard balance transfer card when the 0% period runs out. But card hopping can be risky as there's no guarantee they'll be accepted for a new card especially if they already have outstanding debt.

It's also worth mentioning that during promotional periods failure to meet monthly repayments and stay within the card's credit limit can sometimes lead to the 0% rate being withdrawn.

For this reason it may be beneficial to set up a direct debit to ensure payments are not missed.

3. Acceptance problems

Finally, all these deals are only open to those with excellent credit histories.

These providers can afford to be picky - what they're offering is very exclusive - so applicants need to check and double check the application criteria for each card and fix any possible problems with their credit records before they become really problematic - this guide to checking and repairing a credit rating may be helpful with that.


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