Cash News
It is possible to use a credit card to send payments on Venmo. Before you do, however, it’s important to understand the potential costs involved.
Here’s what you need to know about using a credit card on Venmo and alternatives to consider.
Using a credit card on Venmo
Venmo allows users to send payments and transfer money using a variety of payment methods, including:
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Bank accounts
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Credit cards
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Debit cards
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Prepaid cards
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Other network-branded cards from American Express, Discover, Mastercard, and Visa
How to add a credit card to your Venmo account
The process for adding a credit card to your Venmo account depends on whether you’re using the web app or the mobile app:
Online
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Select “Settings,” then “Payment methods”
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Click on “Add bank or card”
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Select “Debit or credit card”
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Add your card details
Mobile app
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Tap on your picture or initials to open the “Me” tab
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Go to the “Wallet” section
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Tap on “Add bank or card,” then “Card”
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Take a picture of your card with your phone’s camera or add your card details manually
Credit card fees on Venmo
Depending on how you use your credit card, you may or may not be on the hook for a transaction fee and a cash advance fee.
Venmo credit card fee
Venmo charges a 3% fee on payments sent with a credit card. So, even if you’re using a credit card with a high rewards rate on all of your purchases, such as the Citi Double Cash® Card or the Capital One Venture Rewards Credit Card (both of which offer 2% rewards rates on everything), you won’t earn enough in rewards to make up for the cost of the transaction.
Cash advance fee
Some credit card issuers may count peer-to-peer payments as a cash advance, which is typically subject to a fee of 3% to 5% of the transaction amount (or sometimes more), plus a cash advance APR, which is usually higher than the card’s regular purchase APR.
What’s more, cash advances don’t get the same grace period you get with purchases, so interest will start accruing at the higher rate immediately.
No fee on certain purchases
While most Venmo payments with a credit card will incur a fee, you won’t be charged if you make a purchase with an authorized merchant, including both online and physical retailers.
Options include Abercrombie & Fitch, CVS, Foot Locker, Hollister, Home Depot, Hulu, Grubhub, Uber Eats, and more.
When to use a credit card over a debit card on Venmo
The 3% fee Venmo charges on payments sent via credit card doesn’t apply to debit cards. So, if you’re sending money to a friend or family member or a business that doesn’t cover the transaction fee, you’re better off using a debit card instead of a credit card.
If you’re making a purchase with an authorized merchant, however, here are some of the benefits of using a credit card instead of a debit card:
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Fraud protection: Most credit card issuers offer zero-liability fraud protection, which means that if your credit card information somehow falls into the wrong hands, you don’t have to worry about losing any money. With a debit card, you may be liable for some fraudulent charges, depending on when you report them. Even if you’re not liable, it may take some time before the money is restored to your bank account.
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Purchase protection: Venmo offers purchase protection on certain items. But depending on your card, you may enjoy additional protection. For example, the Chase Freedom Unlimited® offers up to $500 in protection per claim against damage or theft for 120 days after your purchase date.
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Extended warranty: Some credit cards also offer to extend the manufacturer’s warranty on certain items. With the Citi Premier® Card, for instance, you’ll get your warranty — either the manufacturer’s or an additional one you purchase — extended by two years, up to a total of seven years.
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Rewards: Many credit cards offer rewards on your everyday purchases. Depending on how often you use Venmo as a payment method, you could be leaving a lot of value on the table by using a debit card instead of a credit card.
Which credit cards are best for Venmo purchases?
Again, it’s important to avoid using credit cards to send payments to friends and family members, as well as small businesses that don’t cover the transaction fee.
But if you’re shopping online or in-store with an authorized merchant, here are a few credit cards to consider:
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Blue Cash Everyday® Card from American Express: For no annual fee, you can get 3% cash back at U.S. supermarkets, on U.S. online retail purchases, and at U.S. gas stations (all up to $6,000 in spending per category per year, then 1%). You’ll earn a $200 statement credit if you spend at least $2,000 within six months of opening (terms apply; see rates and fees). Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit or at Amazon.com checkout.
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Wells Fargo Active Cash® Card: If you prefer simplicity, this card offers a flat 2% cash back on every purchase you make. You’ll also get a $200 bonus when you spend $500 in the first three months.
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Capital One Quicksilver Cash Rewards Credit Card: This cash-back card also earns flat cash back, at an unlimited 1.5% rate. There’s no annual fee and a welcome offer of $200 after you spend $500 on purchases within three months of account opening.
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Bank of America® Customized Cash Rewards credit card: This card offers 3% cash back on an eligible category of your choice, which includes online shopping. It also offers 2% back on certain categories, but keep in mind that all bonus rewards are capped at $2,500 in spending each quarter. The card also offers a $200 bonus when you spend $1,000 in the first 90 days.
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Alliant Cashback Visa® Signature Credit Card: If you’re a big spender, this card offers 2.5% cash back on the first $10,000 you spend every month (then 1.5% back after that). It doesn’t charge an annual fee, but you do need to maintain an eligible checking. account with the credit union and meet certain requirements with it to get the card’s headline rate.
Because Venmo’s list of authorized merchants is still relatively short, though, consider credit cards that offer the most value on all of your purchases, not just ones you make through Venmo.
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