In a fast and advanced world where we are right now, there are several ways of sending and receving money, whether nationwide or internationally from one person or company or institution to another.
And wwe can't talk of sending and receiving money without talking about the important money transfer apps, with the likes of, cash app, PayPal, Venmo, Zelle, Payoneer, and many others.
However, there are other ways that people have come up with only to make sending or receiving money easier. And we will be talking today about credit cards, a very important part of online banking and finance.
Well, if you have been looking for a way to send money to someone using your credit card, then this article has come for you. Because we will be showing you guys how to send money instantly using a credit card.
Ways to Send Money Using a Credit Card
What are Credit Cards?
Credit cards, just like other bank cards, are cards issued by banks or credit unions that can send and receive money from one person or institution to another. But credit cards, as the name states, are used to get credit from specific platforms, and then reimbursed with time.
Credit cards are also just like prepaid cards, that have a specific amount to be loaded in it, for other purchases or transactions.
Features
- Credit cards provide a line of credit that can be used for purchases, cash advances, or balance transfers.
- When balances are not paid in full by the due date, interest charges may apply, typically at a higher rate than other forms of debt.
- Many credit cards offer rewards such as cash back, points, or travel miles for purchases.
- Credit cards may come with various fees, including annual fees, late payment fees, and foreign transaction fees.
- Responsible use of credit cards, such as making payments on time and keeping balances low, can positively affect a credit score.
- Credit cards often come with fraud protection, allowing users to dispute unauthorized charges.
- Cardholders receive monthly statements detailing transactions, payments, and any accrued interest or fees.
Transfer Money Using Credit Card: 4 Methods
Method 1: Direct Transfer Via Payment Apps
As we said above, we cannot talk of sending and receiving money without mentioning money transfer apps. And right now, you will also do the same with this method.
All you have to do is to link your credit card to a money transfer app like PayPal, Cash App, Venmo, or any other and you will be able to initiate direct transfers from your credit card to whoever you want to send money to.
One advantage with this method is that you can send your money and it arrives immediately, that is, instant transfers. However, the fees can amount and go very high at times depending on the app, method of transfer and how much you are sending.
Well, here are some transfer apps you can use:
- Venmo: Users can link their credit cards to send money to friends. However, a fee of about 3% applies to credit card transactions.
- PayPal: Allows users to send money using a credit card. Fees can vary, generally around 2.9% plus a fixed fee based on the transaction amount.
- Cash App: Users can send money using a credit card, but also incur a 3% fee.
Method 2: Using Money Transfer Services
Money transfer services are also some ways you can use your credit card to send money instantly to someone. Some money transfer services like MoneyGram and Western Union are a good example.
With these transfer services, all what you have to do is to go there with your credit card, link it and then complete your transfer easily.
- Western Union: Users can pay with a credit card and choose to send money online or in-person.
- MoneyGram: Similar to Western Union, allowing credit card payments for transfers.
And one other amazing thing with money transfer services are that they don't work only nation wide. They also have a global outreach, being able to send and receive money from someone in a country to another person in a very far country.
The only problem being the fact that you can incur high fees at times with these money transfer services. The fees add depending on where you want to send the money, how you want the money to be sent, and how much you want to send.
Method 3: Bank Transfers
Bank transfers are another way to send money from one person or institution to another using a credit card. When trying to send money via your credit card at the bank, you have to always link your card to the bank account, or inform how much is in your credit card.
Some banks also permit cash advances on credit cards, which can be transferred to a bank account. However, this often incurs high fees and interest rates.
Bank transfers can be very easy to do at times, but it is less advisable to use this method compared to the previous ones.
This is because, not only do they have high fees and incur extra charges for certain transfer methods, but they can also affect your credit score while using a direct bank transfer.
Method 4: P2P Lending Platforms
Lending platforms are also a very good way to send money via a credit card to another person. And it is less expensive since they are lending platforms and know that people come because they don't have enough.
One very good example of a lending platform is LendingClub. Users on this platform can invest in loans or send money, although some fees will apply, but not much.
However, if you are using this method, then you don't want to send much money. They offer very low amounts for lenders and won't permit sending in excess. And you must also read their conditions before engaging since you might not understand something, and it affects you later on.
Fees and Charges
When transferring money using a credit card, it's essential to be aware of the potential fees involved:
- Transaction Fees: Most services charge a percentage of the amount transferred.
- Currency Conversion Fees: If transferring internationally, expect additional fees for currency conversion.
- Cash Advance Fees: Using a credit card for cash advances typically incurs a fee and higher interest rates.
Final Remarks on Money transfer using Credit Card
For many people right now, using a credit card to send or receive money can be a convenient choice. However, understanding the costs, dangers, and most effective techniques is very important.
You may efficiently manage your money transfers while cutting costs simply by choosing the appropriate provider and being informed of the associated costs.
And so, always take into account other alternatives that will cost to you less, such bank transfers or debit card transactions. A smooth credit card money transfer can be achieved with proper preparation and thought.