Can I use a credit card to send cash to someone?

Using Credit Cards for Cash Transfers: Convenience Comes with a Cost

In the digital age, sending cash has become more convenient than ever before. However, when considering using a credit card to send funds, it’s essential to be aware of the fees and potential interest charges associated with this method.

Convenience with a High Cost

While credit cards provide a quick and easy way to send cash to individuals, they come with hefty fees. Most credit card issuers charge a cash advance fee ranging from 3% to 5% of the transaction amount. Additionally, interest charges may start accruing immediately, typically at a higher Annual Percentage Rate (APR) than regular purchases.

For large amounts, the combined fees and interest charges can add up significantly. Suppose you need to send $500 via credit card with a 4% cash advance fee and an APR of 25%. The total cost of the transaction could be around $22 ($20 in fees and $2 in interest charges).

Alternative Payment Apps

Fortunately, there are alternative payment apps that allow for credit card transfers without the steep fees and higher interest rates. Services like Cash App, PayPal, and Venmo enable users to send funds using their credit cards, typically with a lower flat-fee structure.

However, it’s important to note that these apps may have different fees and limits, so it’s advisable to compare options before making a decision.

Exceptions

Some payment apps, such as Apple Cash and Zelle, do not support credit card transfers. They can only be used to transfer funds between users linked to the same platform.

Conclusion

While using a credit card for cash transfers offers convenience, it’s crucial to weigh the potential costs against the benefits. If transferring small amounts, alternative payment apps with lower fees may be a better choice. However, for larger amounts, it’s recommended to explore other payment methods, such as bank transfers or money orders, to avoid excessive charges.