The best 0% money transfer credit cards: clear your overdraft

Want to clear your current account debt cheaply? A 0% money transfer credit card could be a great option. We reveal the longest money transfer deals currently available.

Overdrafts have become more expensive for a lot of people after the Financial Conduct Authority (FCA) simplified interest rates and overdraft fees.

In 2019, the FCA demanded that banks use a single interest rate for overdrafts and said they cannot charge people more for using an unauthorised overdraft.

These changes came into effect in April 2020 but in response, most banks decided to hike their overdraft rates from around 20% EAR to nearly 40%.

That caused widespread outrage and many critics questioned why it was more expensive to borrow with your current account than with a bog-standard credit card.

The FCA said they would look into the matter but eventually decided that banks could roll out these rip-off rates.

Compare credit cards (Image: CTM)

Overdrafts: a terrible way to borrow

Banks and building societies made a frankly incredible £2.4 billion in profits from overdrafts in 2017 alone.

This tells you that borrowing with most current accounts is a costly mistake.

Sure, there are a handful of accounts that still offer cheap or free overdrafts on the market you could switch to, but these aren't of much use for existing debt.

You could instead look into a 0% money transfer credit card if you want to avoid rip-off overdrafts.

These cards give you up to 18 months to clear your debt without incurring any interest charges. That means your debt isn't getting bigger and your repayments become more manageable.

If you've got credit card debt, consider getting a 0% balance transfer card instead.

What are money transfer cards?

These work by letting you transfer money from your credit card to your current account. Once you’ve transferred the money, you can use it to pay off your overdraft.

Credit card companies usually charge high rates of interest on this sort of cash advance.

But 0% money transfer credit cards allow you to transfer money from your card at 0% interest for an introductory period.

This is very similar to a 0% balance transfer card. There are only two differences:

1. You’re transferring money from a credit card to a bank account, instead of transferring debt from one card to another.

2. The fee is often higher for a money transfer than for a balance transfer. Money transfer fees are usually around 4%, while balance transfer fees are typically between 1.5% and 3%.

Got an overdraft you can't shift? Read our guide to getting out of debt here.

Compare money transfer cards (Image: ComparetheMarket)

The longest 0% money transfer deals

Unfortunately, the interest-free period offered on money transfer credit cards has fallen dramatically in recent years.

In 2017, you could bag a 41-month 0% credit card, but the longest offer currently available is just 18 months.

Nonetheless, this could still provide you with vital breathing space and let you get on top of your current account debt for good.

Below are the longest-lasting 0% money transfer deals around. Do note that these are generally reserved for borrowers with the very best credit rating and any unsuccessful application will only further reduce your rating. 

If you aren't confident that you'll be approved, it's worth using an eligibility checker to let you see which cards you're likely to get without leaving a mark on your credit report. 

Credit card

0% money transfer period (months)

Money transfer fee

Cost of moving £1,000

Representative APR after 0% period ends

MBNA Long 0% Money Transfer Card

Up to 18

2.99%*

£29.90

22.9%

Virgin Money 19-Month All Round Card

16

4%

£40

21.9%

Tesco Bank All Round Card

Up to 15

3.99%

£39.90

20.9%

*You could be charged a 3.49% fee depending on your individual circumstances.

Other options to clear overdraft debt

If a money transfer card isn’t for you, another option is to take out a 0% purchase or long-term low-rate credit card and put some new spend on that while whittling away your overdraft.

Failing that you could go for a personal loan if you have sizeable debt racked up. These aren't interest-free – rates will be anywhere from 2.8% to 13% depending on how much you want to borrow – but it will still be cheaper than a typical bank's overdraft.

We've also put together a full guide to clearing debt to help you get on top of your money worries for good.

*This article contains affiliate links, which means we may receive a commission on any sales of products or services we write about. This article was written completely independently.

 

More on credit cards:

The best reward credit cards

The best cashback credit cards

The best 0% purchase credit cards

The best fee-free travel credit cards to use abroad

The best 0% balance transfer credit cards

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