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I have Web Credit in my account but the only option appears to be to redeem it to my bank. Can I transfer it to my Oyster card somehow?

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Yes, you can "transfer" web credits by purchasing Oyster pay as you go credit online using the web credits, in part or in full.

The Transport for London's terms and conditions for online accounts states:

Section 6 - Web credits

  1. You can choose to have certain types of refund or goodwill payments credited to your account as web credits. Any balance accrued can be used as part or full payment when you buy pay as you go credit or Travelcards.

You can do so by going your Oyster account, choose the Oyster card you wanted to top up > Top up or buy season ticket:

Top up or buy season ticket

... and when you click Next page, the web credit is automatically applied, all you need to do is to pay the difference (if any): enter image description here

(Images mine, credits to the OP in reminding me that I have a few quid sitting in my oyster account!)

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