Understanding credit card money transfers fees

amartin903

I've been reading the MSE article on money transfers, but am struggling to understand some of the subtleties of it, so am hoping for some guidance.

I want to buy a car (~£4k), and intend to pay off the loan within 24 months. Rather than a loan at a higher APR, money transfers have caught my eye. The current market leader is offering 0% for 32 months with a 1.69% fee.

I assume if I do a money transfer, I open the account, then immediately transfer the ~£4k to my current account. I then pay the money from my current account to the car dealer, and each month pay off the amount on the credit card - and ensure I pay it off within the 32 months.

However, how does the fee work? Is the fee a one-time fee that is applied immediately once that first ~£4k transfer is made out of the credit card and payable within a certain frame of time? Is it made and simply added on to the amount I owe on the credit card so I factor that in to my monthly repayments? How exactly does a credit card money transfer fee work?

On a side note, if I've said anything above about how money transfers work which is incorrect, do please point it out!

TadleyBaggie

amartin903 wrote: »

Is the fee a one-time fee that is applied immediately once that first ~£4k transfer is made out of the credit card and payable within a certain frame of time?

Exactly this, it will be added to the balance of the credit card at the time the transfer occurs. Be aware that this fee may attract interest, so make sure the first payment you make is greater than the fee. Also pay slightly more than the minimum payment every month, as paying just the minimum payment may be recorded against the account which other lenders in the future may not like.

mparter

Also bear in mind that if you get a card with a £4k limit, you went be able to money transfer it all to your account. I believe it's typically 95% of your credit limit.