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Can You Send Money with a Credit Card?
July 1, 2025
Quick Answer
Yes, you can send money with a credit card, but the transaction is typically handled by a third-party service and may be treated as a cash advance, which often incurs fees.
Should You Send Money With A Credit Card?
Using a credit card to send money has both advantages and potential drawbacks to consider.
Benefits
- Earn rewards: You may be able to earn points, miles, or cash back on the transaction, depending on your card's reward program.
- Convenience and speed: It allows you to send funds immediately, even if you do not have the cash available in your bank account.
- Fraud protection: Credit card issuers typically provide strong consumer protections against unauthorized charges.
Costs
- Cash advance fees: Many credit card issuers classify sending money as a cash advance, which incurs a fee, often a percentage of the transaction amount.
- Higher interest rates: Cash advances usually have a significantly higher Annual Percentage Rate (APR) than standard purchases.
- No grace period: Interest on cash advances typically begins to accrue on the transaction date, without the usual grace period applied to purchases.
- Service fees: The money transfer platform itself may charge a separate processing fee for using a credit card.
How to Send Money With A Credit Card
Sending money with a credit card offers speed and convenience, but it's crucial to understand the process and potential costs. Here’s how to navigate sending funds using your card.
Check Service Compatibility: First, confirm that your chosen money transfer service (like PayPal, Venmo, or a wire transfer platform) accepts credit cards for payments. Not all platforms or recipients support this method.
Choose the Right Card: Selecting the best card is key to minimizing costs. Since many issuers treat money transfers as cash advances with high fees, it's wise to compare your options. A resource like Kudos' Explore Tool can help you find and evaluate different cards.
Understand the Fees and Terms: Be aware that using a credit card to send money is often considered a cash advance. This typically involves a one-time transaction fee (usually 3-5% of the amount) and a higher APR that starts accruing interest immediately, without a grace period.
Initiate and Confirm the Transfer: Enter the recipient’s information and the transfer amount into your chosen platform. Select your credit card as the funding source and carefully review all fees and totals before confirming the transaction.
Pay Your Bill Promptly: To avoid steep interest charges, plan to pay off the transaction amount on your credit card bill as quickly as possible. Due to the lack of a grace period for cash advances, interest will build from day one.
Impact On Your Credit Score
Sending money with a credit card can influence your credit score in a few important ways. It's wise to consider the following potential impacts before proceeding with a transaction.
- Credit Utilization Ratio: This action adds to your outstanding balance, potentially increasing your credit utilization ratio. A higher ratio can signal financial stress to lenders and may lower your credit score.
- Cash Advance Classification: Issuers often classify sending money as a cash advance, which is noted on your credit report. Lenders may view cash advances as a sign of risk, potentially affecting your score negatively.
Alternative Ways To Send Money
Using Your Bank Account or Debit Card
Instead of relying on a credit card, you can link your bank account directly or use a debit card for transfers. This method pulls funds straight from your checking or savings account, which can help you avoid potential cash advance fees that credit card companies sometimes charge for peer-to-peer payments. It's a straightforward way to use your existing funds without incurring extra costs.
Adjusting Payment Settings
Most payment services allow you to customize your funding sources. By navigating to your account settings, you can designate your bank account or debit card as the default payment method. This ensures all future transactions automatically draw from your preferred source. Additionally, explore options for setting up recurring payments for regular transfers, which can streamline the process for consistent financial obligations.
Choose the Right Card to Send Money
Whether you're sending money to friends or paying bills, using the right credit card can make a big difference. With over 3,000 cards available in the US, each with unique rewards, fees, and benefits, picking the perfect one can feel overwhelming. Kudos' Explore Tool simplifies the process, helping you find your credit card match based on your personal spending habits and financial goals.
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Frequently Asked Questions
What fees are involved when sending money with a credit card?
You'll typically pay a transaction fee, often around 3%, plus any cash advance fees and interest from your issuer.
Will sending money with a credit card affect my credit score?
Yes, it can. It's treated as a cash advance, which increases your credit utilization and can lower your score.
Are money transfers with a credit card instant?
Transfer speeds vary. While some services are nearly instant, others may take one to three business days to process.
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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
