If you need to pay for an unexpected expense, if somewhere doesn't accept credit cards or if you need funds in your current account, a money transfer could help.
Available in certain credit cards, money transfers move money directly from your credit card into your own UK current account particularly in emergency situations they can help you be more financially flexible. The minimum amount you can usually transfer is a £100 while the maximum is up to 93% of your credit limit to allow room for any potential interest or fees.
There are two main costs associated with a money transfer: the first is your transfer fee which is a percentage of the money you're moving added on to your balance at the time of the transfer, the second is interest which you'll pay over time until your balance is cleared.Â
It's possible to find interest rates as low as 0% for a set period of time as part of a promotional offer but once the offer runs out your remaining balance will be charged at your standard money transfer interest rate until repaid.
At Bank of Scotland, we will always tell you your money transfer fee and interest rate up front.
Now let's look at a practical example of how a money transfer with a promotional offer works.
Fiona gets an unplanned £500 bill for fixing her boiler. She hasn't budgeted for this in her current account and the plumber doesn't accept credit cards but her credit card has a promotional offer on money transfers with a transfer fee of 3% and 12 months of 0% interest on any money transfers made in the next 30 days.
To cover the cost of the repair she makes a money transfer of £500 from her credit card into her current account. Now Fiona can pay for the repair with her debit card including the 3% money transfer fee which comes to £15. Her overall credit card balance is now £515. Fiona can pay this off in 10 monthly payments of £51.50, she can pay off in one go on her next payday or however she chooses.Â
Fiona won't pay any interest as long as she keeps making at least her monthly minimum payment, clears her full balance before the 0% interest rate offer ends, stays within her credit limit and makes no other spending on her credit card. This also assumes that she had no existing balance on the card to begin with. However if Fiona doesn't clear her balance before the end of the offer period, she'll pay interest at her standard money transfer interest rate.
As you can see a money transfer could help you stay financially flexible but consider all your available options first to make sure that a money transfer is right for you. Thanks for watching.
Visit www.bankofscotland.co.uk/credit cards for more information.