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From an overseas wedding to sending money to family, there are plenty of reasons why you might need to send an international money transfer. One way you can pay for your international money transfer is using your credit card, allowing you to quickly and easily send funds all around the world.
There are plenty of foreign exchange providers who allow you to transfer money overseas from your credit card, but it’s important to compare the cost of your transaction with other transfer options to work out whether you are actually getting a good deal or not.
There are several ways you can use your credit card to pay for an international money transfer, including:
There could be certain situations when sending an international money transfer from your credit card may be a good idea. For example, if you have a high-end rewards credit card, you may be able to access significant rewards (such as frequent flyer points) by increasing the amount you spend on your card. However, as mentioned above, this typically works when using a service like Moneygram or Western Union and not your bank. Using your bank could charge higher interest rates and fees, ruining any gain from your points.
Another situation where credit card transfers can be useful is in an emergency. For example, you may need to send an urgent transfer to a loved one who has been mugged overseas and has no cash. In this case, sending a transfer within minutes via Western Union or MoneyGram and paying using your credit card could represent the most effective solution.
While there are specific situations where credit card transfers can be useful, in many cases they do not represent the most cost-effective solution. When you pay for a transfer with your credit card, the transaction will often be treated as a cash advance by your card provider. This typically attracts a higher rate of interest than an ordinary card payment, and that interest may also apply from the day you make the transfer.
Using a credit card to send money overseas will also usually incur additional fees and charges. There may be a cash advance fee charged by your credit card provider, while other charges such as currency conversion fees can also eat into your pocket.
Another risk of transferring money using your credit card via a bank is that you probably won’t get a competitive exchange rate. Other transfer options, such as specialist online transfer companies that allow you to fund a transfer with a direct debit from your bank account, often allow you to access far superior exchange rates and get better value for money.
Finally, credit card payment simply isn’t offered as an option by many international transfer providers, which means it often isn’t a viable solution to your transfer problem.
All of the transfer options listed above — your bank, Western Union, MoneyGram and PayPal — allow you to pay for your transaction with funds from your bank account. This is always cheaper than paying with your credit card, so is worth considering if you want to save money. MoneyGram and Western Union also allow cash transfers in person if that option is more suitable.
But the most affordable international money transfers are usually offered by online money transfer companies such as OFX and WorldFirst. These providers specialise in foreign exchange and moving money across international borders for the cheapest possible price. They have lower fees and much better exchange rates than banks and other bricks-and-mortar transfer providers, and they offer fast and secure transfers.
The end result of these benefits is a better deal for you and more money in your recipient’s pocket.
Back to topMake sure to consider the below features when weighing up the pros and cons of international money transfer providers:
Although you can transfer money overseas from a credit card, this is typically not a convenient nor affordable transfer solution. Specialist online transfer companies provide a much easier and more cost-effective solution, so make sure to compare your transfer options before parting with any money.
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