What sending cash with a credit card actually means
Sending cash with a credit card does not mean your credit card company mails a check or deposits money into someone else's bank account. Instead, you use your credit card to fund a money transfer through a third-party service — companies like Western Union, MoneyGram, Wise, or PayPal. The service takes your credit card payment, then delivers the money to the recipient through their own network.
The key difference from using a debit card or bank transfer is that you are borrowing from your credit card issuer to make the transfer. That borrowed amount shows up as a charge on your statement, and you pay interest on it if you do not pay the full balance by your due date. Some credit card companies and money transfer services treat this as a cash advance rather than a regular purchase, which means higher fees and interest rates from day one.
Key Takeaways
- Money transfer services like Western Union and MoneyGram accept credit cards, but many charge a cash advance fee (usually 3 to 5 percent) plus a transfer fee on top of that.
- Your credit card issuer may treat a credit card money transfer as a cash advance, which means a higher interest rate and no grace period — interest starts accruing when ready.
- Peer-to-peer apps like Venmo, PayPal, and Square Cash let you link a credit card, but most charge a fee (1 to 3 percent) for credit card funding.
- Bank transfers and debit card transfers cost less or nothing, so use a credit card only when the recipient cannot receive money any other way.
Where the fees come from and how much they add up
When you send money with a credit card, you typically pay two separate charges. The first is a cash advance fee from your credit card issuer — usually 3 to 5 percent of the amount you transfer, with a minimum charge of $5 to $10. The second is a transfer fee from the money transfer service itself, which ranges from $2 to $15 depending on the service and how fast you want the money to arrive.
On top of those upfront fees, your credit card issuer charges interest on the transferred amount starting when ready — there is no grace period like there is for regular purchases. The interest rate for cash advances is often higher than the rate for regular purchases, sometimes 2 to 5 percentage points higher. If you send $500 and pay it back over three months, the interest alone could cost you $20 to $40.
To see what your card charges, check your cardholder agreement or call the number on the back of your card and ask: "What is your cash advance fee and cash advance interest rate?" Write down both numbers. Then compare them to what the money transfer service charges on their website before you proceed.
Money transfer services that take credit cards
Western Union and MoneyGram are the largest networks for sending cash internationally and domestically. Both accept credit cards at their websites and at physical locations (grocery stores, pharmacies, check-cashing shops). Western Union typically charges $5 to $50 depending on the amount and destination; MoneyGram charges $2 to $20 for domestic transfers. Both will treat your credit card as a cash advance.
Wise (formerly TransferWise) specializes in international transfers and charges a flat fee plus a small percentage of the amount — usually 1 to 2 percent total. It accepts credit cards but charges a 2 percent fee for credit card funding on top of the transfer fee. PayPal lets you link a credit card and send money to another PayPal user or to a bank account; it charges 2.2 percent plus $0.30 for credit card transfers within the United States.
Before you choose a service, visit their website, enter the amount and destination, and see the total cost displayed. That total should include the transfer fee but may not include your credit card issuer's cash advance fee — you have to calculate that separately using the percentage your card charges.
Peer-to-peer apps and what they charge for credit cards
Venmo, PayPal, Square Cash, and Zelle are apps that let you send money to friends and family. Venmo, PayPal, and Square Cash all accept credit cards, but they charge a fee for it — usually 1 to 3 percent of the amount. Zelle does not accept credit cards; it only works with bank accounts and debit cards.
The advantage of these apps is speed: money usually arrives within minutes to hours rather than days. The disadvantage is that the recipient must also have the app, and the fee for using a credit card is higher than it would be if you linked a bank account or debit card instead. If you send $100 to a friend using Venmo with a credit card, you might pay $3 in Venmo's fee plus whatever your credit card issuer charges as a cash advance fee.
These apps are best for splitting bills or paying back a friend when you do not have access to your bank account at that moment. If you are sending money regularly or sending a large amount, a bank transfer or debit card transfer will cost you far less.
When a credit card transfer makes sense and when it does not
Use a credit card to send money only when you cannot use a bank transfer, debit card, or the recipient's preferred method. The fees and interest rates are too high to use as your default option. A few situations where it might make sense: the recipient is in a country where bank transfers do not work, you are traveling and do not have access to your debit card, or you need to send money when ready and your bank's transfer is too slow.
Do not use a credit card transfer to pay bills, send money to family regularly, or move money between your own accounts. Those situations have cheaper options. If you are considering a credit card transfer because you do not have money in your bank account right now, pause and think about whether you can wait a day or two for a bank transfer instead. Paying 5 to 10 percent in fees to borrow money at a high interest rate is expensive, and it can become a habit that costs you hundreds of dollars a year.
How to reduce the cost if you have to use a credit card
If you must send money with a credit card, take these steps to keep the cost as low as possible. First, call your credit card issuer and ask if they offer a lower cash advance fee for transfers to certain services or destinations. Some cards waive the fee for transfers to specific partners. Second, compare at least two money transfer services side by side — enter the exact amount and destination into each one and write down the total fee. The difference between services can be $5 to $20 on a single transfer.
Third, send the full amount at once rather than making multiple transfers. Each transfer triggers a separate fee, so one $500 transfer costs less than five $100 transfers. Fourth, pay off the transferred amount as fast as you can. Every day the balance sits on your card, interest is accruing at a rate higher than your regular purchase rate. If you can pay it back within a week, the interest cost will be minimal; if it sits for a month, the interest can exceed the transfer fee itself.
Frequently Asked Questions
Will my credit card company let me send money to anyone, or are there limits?
Your card issuer sets a cash advance limit, which is usually lower than your overall credit limit — often $500 to $2,000. The money transfer service may also have its own limits. Check both before you attempt a transfer. If you hit your limit, you cannot transfer more until you pay down the balance.
What happens if the recipient does not pick up the money or the transfer fails?
If the recipient does not claim the money within a set time (usually 30 to 90 days), the service refunds it to your credit card. You will still owe the fees you paid upfront. If the transfer fails due to incorrect information, the service typically refunds it within 5 to 10 business days, though you may lose the fee.
Can I dispute a credit card money transfer if something goes wrong?
Disputing a money transfer is harder than disputing a regular purchase. Your credit card company may not reverse the charge if the money was sent to the correct recipient, even if you changed your mind. Read the money transfer service's refund policy before you send, and contact them first if there is a problem.
Is sending money with a credit card safer than sending cash by mail?
Yes. A money transfer service leaves a record, and the recipient must provide identification to claim the money. Mailing cash leaves no record and can be lost or stolen. However, a credit card transfer is not safer than a bank transfer or debit card transfer — it is just more expensive.