Balance transfer vs money transfer: what each one does and what it costs

A balance transfer moves debt from one credit or store card to another credit card. A money transfer moves money from your credit card into your own UK current account, where you can spend it as cash¹. They sound similar and both usually cost a fee, but they do different jobs and the fees are not the same size.

The fee is the part most people want to know first. Balance transfer fees are usually a percentage of the amount you move, commonly around 2% to 4%². Money transfer fees are typically higher, at around 4%³. On a £5,000 balance, a 2% to 4% fee works out at £100 to £200².

Both transfers also have limits. You can only move a balance that fits within the credit limit of the new card, and the fee is added to your balance, so it uses up part of that limit too⁴. You generally cannot transfer a balance to a card from the same provider⁴.

Balance transfer or money transfer: what each one moves and where the money goes

The two products solve different problems, and the difference is where the money ends up.

A balance transfer moves debt. You take an existing credit card or store card balance and shift it onto a different credit card, usually one with a lower or 0% interest deal for a set period². Nothing lands in your bank account. The point is to cut the interest you pay on money you already owe, and a balance transfer can save you money by reducing that interest, usually for a fee⁵.

A money transfer moves cash. It lets you move money from your card's credit limit into your own UK current account, where you can spend it¹. Barclays describes money transfers the same way: they allow you to move money from your card's credit limit to your current account to spend⁶. That cash could cover a bill, a purchase, or another debt, but it is still borrowing on the card and it still has to be repaid.

One more term worth separating out: an international money transfer is a different thing again. It allows people to send funds from a UK account to another account in a different country¹. That is a payments service, not a credit card feature, and it is not what a money transfer credit card does.

So the question to ask is simple. Are you moving a debt you already have, or are you turning your credit limit into spendable cash? The first is a balance transfer. The second is a money transfer.

Transfer fees: usually around 2% to 4% of the amount

Most credit card providers charge 2% to 3% of the amount you are transferring as a one-off fee⁷. Experian puts the typical balance transfer fee at around 2% to 4% of the amount you are transferring². Citizens Advice describes it as a handling fee of around 2% of the balance when you move a balance to another card⁸.

The range across the market is wider than the typical figure suggests. Which? found that the longest 0% balance transfer deals often come with a fee typically around 3% to 3.5%, and are usually reserved for applicants with the strongest credit records⁹. Its earlier research put the average fee for transferring a balance to a fee-charging card at 2.65%, up from 2.42% the year before, with some cards charging up to 5% for each balance transfer¹⁰.

Individual providers show how the percentage translates into their own terms. Nationwide, apart from promotional offers, charges a balance transfer fee of 2.4% of the amount transferred, or £5, whichever is greater¹¹. HSBC may charge a balance transfer fee with a minimum of £5 on each balance transferred from another card, for existing customers with a balance transfer offer¹².

The fee is not always a percentage. Some credit card companies charge a balance transfer fee to take over your unpaid debt, and it can be charged as a flat fee or depend on the amount you are transferring¹³. Either way, it is charged each time a balance is moved, so moving several balances can mean paying several fees¹⁴.

What a transfer costs in pounds on a typical balance

Percentages are hard to picture, so it helps to see the fee as money.

On a £5,000 balance transfer, a fee of around 2% to 4% means paying around £100 to £200². A worked example in the market shows a £5,000 balance moved at a 2.5% fee costing £125¹⁶. On a smaller balance, transferring £1,000 will cost between £30 and £50 at typical fee levels⁴, and at a 3% fee, transferring £1,000 costs a £30 transfer fee¹⁷.

The £2,000 row matches a worked example from StepChange: if your balance is £2,000 and the transfer fee is 3%, you will pay a £60 transfer fee⁷. The £5,000 row matches Experian's range of around £100 to £200².

Two things follow from this. First, the fee is money you pay for the transfer itself, separate from any interest. Second, because the fee is added to your balance, you are borrowing a little more than the debt you moved, and that extra amount can itself attract interest once a promotional period ends¹⁸.

Fees may mean you save less than you expect¹⁹. A 0% deal with a 3% fee is not free money; it is a trade of a known one-off cost for a period without interest. Whether that trade works depends on how quickly you clear the balance.

A transfer fee is charged on top of any interest

The fee and the interest are separate charges, and both can apply.

A balance transfer is when you move balances from one credit or store card to another, and in addition to interest, a transfer fee might apply²⁰. Some cards offer 0% interest deals for a limited period, but there may be a charge for doing this²¹. So a card can be interest-free on the transferred balance for a set number of months and still charge you a fee to make the transfer in the first place.

That matters most when the promotional period ends. Once it does, the interest rate that applies to the balance is the card's standard rate, and the fee you paid is already part of that balance. The fee is not refunded and does not reduce what you owe; it increases it.

The Financial Conduct Authority's own research found that, of the balance transfer customers who paid a fee, 78% reported it was the same as expected and 12% reported it was higher than expected²². That is a reminder to check the exact fee before transferring rather than assuming.

Limits on what can be transferred and between which cards

There are three limits worth knowing before you plan a transfer.

The credit limit on the new card. You can only transfer a balance that is within the credit limit of the new card⁴. If the card has a £3,000 limit and you want to move £4,000, you cannot move the whole balance. The fee counts against the limit too, because it is added to your balance¹⁸.

Which cards you can move between. You generally cannot transfer your balance to a card from the same provider⁴. Where two brands have merged, transfers between their cards can also stop. Nationwide states that from 2 April 2026 Virgin Money's business became part of Nationwide, so balance transfers between Nationwide and Virgin Money credit cards are no longer possible²⁴.

What kind of balance can be moved. Balance transfer cards are used to move credit card balances and some store card balances onto a single card, and transfer fees may apply²⁵. Not every store card can be moved, so it is worth checking with the provider.

What protects you, and where it stops

The rules that apply to credit cards generally apply here. If something goes wrong with a transfer, you can complain to the provider first, and if you are not satisfied, take the complaint to the Financial Ombudsman Service.

Section 75 protection is a separate matter. It covers purchases made directly with a credit card, not the act of moving a balance or taking cash out. A balance transfer is not a purchase, so it does not attract Section 75 cover in itself.

The clearest protection is the information you get before you agree. Balance transfers might include a balance transfer fee, which the provider will always explain clearly²⁶. Read the fee, the length of any interest-free period, and what rate applies afterwards.

If card debt is becoming hard to manage, free and impartial help is available. StepChange, National Debtline and Citizens Advice all offer free debt advice, and there are free debt consolidation options that do not involve taking on new credit¹⁵. In Scotland and Northern Ireland the routes and the sources of free help differ, so it is worth checking the guidance for where you live¹³.