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How to Send Money With a Credit Card: All You Need to Know

How to Send Money With a Credit Card: All You Need to Know
Jason Steele
Jason SteeleUpdated August 18, 2022
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Credit cards aren’t only for buying things and earning rewards. They can also be used to send money to a loved one, repay what you owe a friend, transfer funds overseas, or consolidate debt.There are a few different ways to send money by credit card, so it’s important to understand what makes the most sense for your situation — and whether you should do it at all. To give you a better understanding of how the process works, and the costs involved, here’s everything you need to know about using credit cards to send money.

What to Consider Before Sending Money With a Credit Card

Of course, you’ll want to be smart and safe if you send money with a credit card. First and most important, you should only send money to people you know and trust. Second, because most credit cards are designed for making purchases, not to take out cash loans, check your credit card statement balance to make sure you can cover the amount you’ll be sending or transferring. You may decide it makes more sense to ask family and friends for a short-term loan instead.If you decide that sending money with a credit card is the best option, try not to do it too frequently. Transferring money between accounts, for example, can mean paying fees and credit card interest rates that are typically high. In general, before you make a transaction like this, it’s a good idea to make sure your credit card account is in good standing along with your credit score. For instance, pay off credit card debt whenever you can. This is important because it’s one of the factors that affect your credit scoreRecommended: Credit Card Terms Explained

4 Ways to Use Your Credit Card to Send Money

Here are some of the different ways to send money by credit card. Weigh the pros and cons to decide which makes the most sense for you.

1. Transfer Programs

Transfer programs, also called balance transfers, allow cardholders to transfer money from one account to a bank account or debit card. A balance transfer is one way of achieving credit card consolidation by sending your debt to another account with a lower APR. However, transfers come with added fees because they are counted as cash advances.Expenses that often go along with transferring money using a credit card include high APRs, balance transfer fees (typically 2% to 3% of the amount transferred), and international transfer fees (typically 1% to 3%). Balance transfer fees can be listed as a percentage or with minimum dollar fees of $5 to $10 or more. The balance transfer fee is added to the card’s balance once the transfer is complete. One way to save is to look for rewards cards that favor balance transfers. Some cards also offer low introductory APRs on balance transfers. While it’s common to see APRs of 15% or higher for transfers, some lenders offer balance transfer cards with low to 0% APR on transfers initially and no annual fees. 

2. Payment Transfer Services

You can use a wire transfer service like Western Union to send money with your credit card. You just set up an account and make the transfer with your credit card (you can typically do it online). But check first to see what fees are involved. And look for any hidden fees to avoid surprises.

3. Cash Advances

Another way to send money using a credit card is to take out a cash advance, which is essentially a short-term loan. What you’re doing in this case is borrowing money from your credit card provider up to a certain limit. This is just one of the ways credit cards function.Similar to transfer programs, cash advance fees often entail a percentage of the advance or minimum payment. Cash advances are likely to accrue interest right away and at higher rates than other transactions. This method can be helpful if you’re in a crunch for cash, or if you need money while traveling abroad. However, the fees and interest can add up fast.

4. Peer-To-Peer Apps

These apps can be used to easily and quickly send money to friends, family, and other people using your credit card. Some apps, like Zelle, are not yet equipped to use credit cards. But you can use your credit card to send money with Venmo and Paypal.Venmo charges a 3% transaction fee when using a credit card. Venmo offers its own line of credit cards that offer cash-back rewards and other special features, but the 3% transaction fee still applies. PayPal requires a 2.9% transaction fee plus 30 cents or more for currency conversion fees. Paypal is revamping its PayPal Cashback Mastercard credit card to give users 3% cash back on purchases made through PayPal.

How Much Does It Cost to Send Money Using Your Credit Card?

Depending on the method you choose and how often you send money with a credit card, the costs can quickly add up. There are fees for almost every kind of credit card cash transfer. Overall, most fees for sending money with a credit card range from 1% to 3%, not including interest charges and currency exchange fees that may apply.

Alternatives to Using Credit Cards for Sending Money

There are several low-risk ways to send money to other people that don’t involve credit cards. For example, you can write them a check, send them a money order, wire money electronically, or use a peer-to-peer app to send money to them from your bank account. 

The Takeaway

Using a credit card to send money can sometimes be useful, especially if you’re in a crunch, but it does involve fees and higher interest rates. Check into all the different options for sending money to see if using a credit card is your best choice. If it is, you can use peer-to-peer apps, transfer services, or cash advances to send the money where you need it to go.When you’re looking for a new credit card, whether you’ll be using it to send cash or not, it’s a good idea to review all the options to get the best terms and interest rates available. Lantern by SoFi can help. Our credit card preview tool makes it easy and convenient to find the best card for your needs.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.SOLC0222061

Frequently Asked Questions

How much does it cost to send money overseas using your credit card?
Does sending money with your credit card affect your credit score?

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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