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
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.
What is the meaning of money transfer? ›
Money transfer basics. A money transfer is when you transfer funds from a credit card directly to a bank account for use on purchases.
What is an example of money transfer? ›
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 the difference between money transfer and bank transfer? ›
Like wire transfers, money transfers don't transport any physical money but transmit financial information between the relevant parties. But as we said above, money transfers don't go through banks (though), and they use their own communication systems instead of using the SWIFT system.
How does someone transfer you money? ›
Wire transfers and ACH transfers allow you to move money between your account and someone else's account, either at the same bank or at different banks.
Are money transfers safe? ›
Transferring money via bank transfer is the most common way to transfer money, and many people do it without thought. International bank transfers carry more risks due to the slightly more complicated process, but are still incredibly safe when implemented correctly.
Why do people use money transfer? ›
You need to move large amounts of money.
For this reason, wire transfers are often used to pay invoices, to send funds among family, or for real estate transactions.
How do you make a money transfer? ›
Steps for Transferring Money Between Banks
- 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.
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.
What are three 3 forms of transfer payments? ›
Government transfer payments include Social Security benefits, unemployment insurance benefits, and welfare payments. Taxes are considered transfer payments. Governments also receive transfer payments in the form of fees, fines, and donations from businesses and persons.
What are the required details for a bank transfer?
- The full name of the recipient.
- The amount of money you want to transfer.
- Your recipient's 6-digit sort code.
- Your recipient's 8-digit account number.
- A payment reference (usually with your name, so the recipient can identify the source of money)
- Date of transfer.
A cash transfer is a direct transfer payment of money to an eligible person. Cash transfers are either unconditional cash transfers or conditional cash transfers. They may be provided by organisations funded by private donors, or a local or regional government.
How does money transfer work? ›
The recipient's bank initiates the transfer of funds, not the sender's bank. When a customer sets up this type of bank transfer to make a payment, they provide their name and account details to the recipient, who will then use the account information to pull funds from the sender's account into their own.
What is considered a money transfer? ›
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.
Do you need a bank account to transfer money? ›
Money transfer services, prepaid debit cards, gift cards, and digital payment apps or digital wallets are alternatives to sending and receiving money without a bank account.
Does transferring money go in straight away? ›
Bank to bank transfer times can vary across financial institutions depending on the type of transfer you make. If you're making a traditional inter-bank transfer it will take 1-3 business days. If you use NPP Faster Payments or a PayID it can be near real-time.
Does transferring money happen immediately? ›
Most domestic transfers are processed on the same day, and international transfers are typically completed within a few days (depends on country). You need to move large amounts of money. Though limits vary based on the money transfer provider, they tend to be high.
How is money actually transferred? ›
The funds transfer process generally consists of a series of electronic messages sent between financial institutions directing each to make the debit and credit accounting entries necessary to complete the transaction.
What happens when you transfer money to another bank? ›
A bank-to-bank transfer, also known as an external transfer, is the process of getting funds from an account at Bank A to another at Bank B. External transfers that are electronic or utilize the internet can expedite getting money to someone else's account by eliminating the need to physically move cash between banks.
