If somewhere doesn’t accept credit cards or if you need funds in your current account to pay for an unexpected bill, for instance. A money transfer could help.
Available on some credit cards, Money transfers move money directly from your credit card into your own UK current account and can help you be more flexible with your finances in emergency situations.
You can transfer as little as £100, the minimum usually allowed. While the maximum is usually 93% of your credit limit to leave room for any potential interest or fees.
When it comes to requesting a money transfer, there’s two main costs you should be aware of.
The first is your transfer fee. 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.
Sometimes, you’ll find interest rates as low as 0% for a set period of time as part of a promotional offer. But remember that once the offer runs out, any remaining balance will be charged at your standard money transfer interest rate until repaid.
To help you make an informed decision, at Lloyds Bank we’ll always tell you your money transfer fee and interest rate up front.
Now let’s see how a money transfer with a promotional offer works in practice with help from Elisha.
One month, Elisha gets an unplanned £500 repair bill for her car. Unfortunately, she hasn’t budgeted for this in her current account. Plus, her garage doesn’t accept credit cards.
However, she has a credit card with a promotional offer. It has a money 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, she can pay for the repair with her debit card.
Including the 3% money transfer fee, which costs her £15. Her overall credit card balance is now £515.
She can pay this off in 10 monthly payments of £51.50. She can pay it off in one go on her next payday. Or, however she chooses.
Elisha won’t pay any interest as long as she pays at least her monthly minimum payment, clears her full balance before her 0% interest rate offer ends, stays within her credit limit and doesn’t spend anything else on her credit card. This also assumes that she had no existing balance on the card to begin with.
But it’s important to note that if she doesn’t clear her balance before the end of the offer period she’ll pay interest at her standard money transfer interest rate.
Like Elisha, you can use a money transfer to help you stay financially flexible. But be sure to consider all your available options to make sure that a money transfer is right for you.
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Visitlloydsbank.com/creditcardsfor more information.
FAQs
A transfer is usually initiated from one bank or financial institution to another. Rather than cash, the participating institutions share information about the recipient, the bank receiving account number, and the amount transferred. The sender pays for the transaction upfront at their bank.
What is an example of a money transfer? ›
In the simplest example, the originator instructs her bank to transfer funds to the beneficiary and the bank sends an instruction to its correspondent, which makes the funds available to the beneficiary.
What is the meaning of transfer money? ›
In finance, a transfer refers to the action of moving money, assets, or ownership rights from one account to another, or from an owner to a new owner. A transfer can involve moving money between two accounts owned by the same person, or it can involve moving money between accounts owned by different people.
What is considered a money transfer? ›
A wire transfer is a method of transmitting money electronically between people or businesses in which no physical money is exchanged. The sender is the one who provides all the instructions for the transfer, which may include the recipient's name, bank, account number, amount, and sometimes a pickup location.
Is a money transfer a good idea? ›
Making a money transfer
This allows you to pay off an overdraft, or cover an essential or unexpected bill using a credit card. Before you make a transfer, check the charges and interest rates with your card provider as doing this is usually more expensive.
Are money transfers safe? ›
In short, yes, wire transfers are very safe. Security lies in encryption technology, which encrypts all data sent over the internet during transmission. This ensures that only authorized parties can access your personal information while it's being transferred from one place to another.
What is the money transfer method? ›
Money transfer generally refers to one of the following cashless modes of payment or payment systems: Electronic funds transfer, an umbrella term mostly used for bank card-based payments. Giro (banking), also known as direct deposit. Money order, transfer by postal cheque, money gram or others.
What is a cash money transfer? ›
Cash transfers allow money to be sent and received anywhere in the world without the sender or recipient needing a bank account. A range of financial service providers offer such transfers as a service, usually at a cost.
What is a money transfer called? ›
Wire transfer. The term “wire transfer” is often used to refer to any electronic transfer of money from one person to another.
Why do people use money transfer? ›
With online money transfers you are able to transfer funds to family or friends overseas. Many service providers also include access to a currency conversion tool so you can monitor the exchange rates and send money online when the rates are in your favour.
The sender sends the money to their bank. The bank then sends the money to the recipient's bank, and finally to the recipient. This works because the sender pays for the transaction and their bank sends a message through a secure system to the recipient's bank.
How do you make a money transfer? ›
Log into your bank's website or connect via the bank's app. Click on the transfer feature and choose transfer to another bank. Enter the routing and account numbers for the account at the other bank. Make the transfer.
Do banks track money transfers? ›
You can request a trace on the transfer, and your bank will be able to tell you whether the money has been deposited into the recipient's account².
What is the difference between money transfer and bank transfer? ›
Wire transfers tend to run through banks, while money transfers are facilitated by other providers. It seems like a no-brainer: you already go to your bank for other financial matters, and you trust them to handle your money and information.
What happens when you transfer money? ›
The customer instructs their bank to transfer the relevant amount to the business' bank account, including the unique reference code to indicate the purpose of the transfer. The customer's bank transfers the funds to the business' bank. The business receives the funds into their account, noting the reference code.
How do transfer payments work? ›
A transfer payment is a payment of money for which there are no goods or services exchanged. Transfer payments commonly refer to efforts by local, state, and federal governments to redistribute money to those in need. In the U.S., Social Security and unemployment insurance are common types of transfer payments.
How does transferring money between banks work? ›
Steps for Transferring Money Between Banks
You can move money from one bank to your other one online in a few steps: Log into your bank's website or connect via the bank's app. Click on the transfer feature and choose transfer to another bank. Enter the routing and account numbers for the account at the other bank.
How does someone transfer you money? ›
One of the safest, most efficient ways to move money from your account into someone else's is to send a wire payment through your financial institution.
