Credit cards are not the best tool for sending money, but you have a few options if you need to
A credit card is designed to borrow money from a lender, not to move your own money from place to place. When you use a credit card to send money, you are usually taking a cash advance or paying a fee to a money transfer service — both cost you more than other methods. The most common ways to send money with a credit card are through third-party apps like PayPal or Square Cash, by requesting a cash advance at an ATM or bank, or by paying a bill directly on someone else's behalf. Each method has different costs and speed, and some work only for specific situations.
Key Takeaways
- Money transfer apps like PayPal, Venmo, and Square Cash let you link a credit card, but they charge a fee (usually 2 to 3 percent) to move the money.
- A cash advance from your credit card at an ATM or bank gives you physical cash but costs an upfront fee plus interest that starts when ready.
- Paying someone's bill directly (utility, rent, medical) using your credit card avoids a middleman fee but only works if the biller accepts credit cards.
- Wire transfers and peer-to-peer payment services are faster and cheaper than credit card options for most situations.
- Using a credit card to send money counts as a purchase or advance on your credit limit and affects your credit utilization ratio.
Money transfer apps that accept credit cards
PayPal, Venmo, Square Cash, and Google Pay all let you link a credit card and send money to another person. The recipient usually gets the money in one to three business days. You will pay a fee for this convenience — typically 2 to 3 percent of the amount you send, though some apps charge a flat fee instead. That means sending $100 costs you $2 to $3 in fees alone.
The catch is that these apps treat a credit card differently than a debit card or bank account. When you link a debit card or bank account, most apps charge no fee. When you link a credit card, the app charges you because it is paying a processing fee to the credit card company. That cost gets passed to you. Some apps, like Venmo, let you send money for free to friends but charge 1 to 3 percent if you use a credit card instead of a bank account.
These apps work well if you need to split a bill with someone, send a gift, or reimburse a friend quickly. They do not work for sending money to a business or paying a bill — most apps restrict transfers to person-to-person only. Check the app's terms before you link your card, because some apps have daily or monthly limits on how much you can send.
Cash advances: getting physical money from your credit card
You can withdraw cash using your credit card at an ATM or by visiting your bank or credit card issuer's branch. This is called a cash advance. The money is yours to use however you want, but the cost is steep. Most credit cards charge a cash advance fee of 3 to 5 percent of the amount you withdraw, with a minimum fee of $5 to $10. If you withdraw $200, you might pay $6 to $10 just for the withdrawal.
On top of the fee, interest starts accruing when ready — there is no grace period like there is for regular purchases. Your credit card's interest rate for cash advances is often higher than the rate for regular purchases, sometimes 2 to 3 percentage points higher. If your card charges 18 percent for purchases, the cash advance rate might be 21 percent. That interest compounds daily until you pay the balance off.
A cash advance also counts against your credit limit and raises your credit utilization ratio, which can lower your credit score. Use a cash advance only if you have no other way to get the money and you can pay it back quickly.
Paying someone's bill directly with your credit card
If you want to send money to cover someone else's rent, utility bill, medical bill, or insurance payment, you can often pay that bill directly using your credit card. Call the biller (the landlord, utility company, hospital, or insurance company) and ask if they accept credit card payments. Many do, though some charge a processing fee of 2 to 3 percent.
This method avoids the middleman — you do not need a money transfer app or a cash advance. The money goes straight to the bill. The downside is that not all billers accept credit cards, and some that do charge a fee. A utility company might accept credit cards with no fee, while a property management company might charge 2.5 percent. Ask before you pay.
This option works best when you know exactly what bill you are paying and the biller's contact information. It does not work if you want to send money for an unspecified purpose or if the person you are sending it to does not have a bill you can pay on their behalf.
Why other methods are usually cheaper and faster
Before you use a credit card to send money, consider these alternatives. A bank-to-bank transfer or ACH transfer (Automated Clearing House) is free and takes one to three business days. If you both use the same bank, an internal transfer takes minutes and costs nothing. A wire transfer costs $15 to $30 but moves money the same day, which is faster than any credit card method.
If you are sending money internationally, a credit card is rarely the best choice. International wire transfers, services like Wise (formerly TransferWise), and remittance companies all offer better exchange rates and lower fees than credit card cash advances or transfer apps. A credit card cash advance abroad can cost 5 to 10 percent in fees and unfavorable exchange rates combined.
The only time a credit card makes sense is when the other person does not have a bank account or when you need to build credit card purchase history for a specific reason. Even then, the fees and interest usually outweigh the benefit.
How sending money with a credit card affects your credit score
Using a credit card to send money counts as either a purchase or a cash advance on your credit limit. Either way, it raises your credit utilization ratio — the percentage of your available credit you are using. If your credit limit is $1,000 and you send $300 using your card, your utilization jumps to 30 percent. Credit scoring models penalize high utilization, so your score may drop temporarily.
A cash advance has an extra impact because it often carries a higher interest rate and no grace period. The interest accrues when ready, and if you carry a balance, you will pay more in interest charges. This can hurt your score further if the balance stays high for months.
To minimize the damage, pay off the balance as soon as possible. If you can pay it off within the same billing cycle, the interest charge will be small. If you cannot, consider using a different method to send the money instead.
Comparing the costs of different credit card money-sending methods
| Method | Fee | Speed | Best for |
|---|---|---|---|
| Money transfer app (PayPal, Venmo, Square Cash) | 2–3% of amount sent | 1–3 business days | Splitting bills, sending gifts to friends |
| Cash advance at ATM | 3–5% plus interest (18–25% APR) | when ready (cash in hand) | Emergency cash when no other option exists |
| Paying a bill directly | $0–3% (depends on biller) | 1–5 business days | Covering rent, utilities, medical bills |
| Bank transfer (ACH) | $0 | 1–3 business days | Sending money to anyone with a bank account |
| Wire transfer | $15–30 | Same day | Urgent transfers, large amounts |
Frequently Asked Questions
Can I use a credit card to send money through Venmo or PayPal without paying a fee?
No. Both apps charge 2 to 3 percent when you link a credit card. If you link a debit card or bank account instead, most transfers are free. The fee exists because the app has to pay the credit card company to process the transaction, and that cost is passed to you.
What is the difference between a cash advance and a regular credit card purchase?
A cash advance charges a fee upfront (3 to 5 percent), interest starts when ready with no grace period, and the interest rate is usually higher than for purchases. A regular purchase has no upfront fee, a grace period of 20 to 30 days before interest starts, and a lower interest rate. Never use a cash advance unless you have no other option.
If I send money with my credit card, does it count as a purchase on my statement?
It depends on the method. Money transfer apps and bill payments usually show as purchases. Cash advances show separately as cash advances. Both count toward your credit limit and credit utilization ratio. Check your statement to see how your card issuer categorizes the transaction.
Can I send money internationally using a credit card?
Yes, but it is expensive. A credit card cash advance abroad charges a fee, interest, and an unfavorable exchange rate. Wire transfers, Wise, and remittance companies offer better rates. If you must use a credit card, a money transfer app may be cheaper than a cash advance, but compare fees first.
What should I do if I need to send money urgently and have no other way to do it?
A wire transfer is the fastest option and usually costs $15 to $30. If you do not have access to wire transfer, a money transfer app takes one to three business days and costs 2 to 3 percent. A cash advance gives you physical cash when ready but costs 3 to 5 percent plus interest. Choose based on how urgently you need the money and how much you can afford to pay in fees.