Can You Use a Credit Card on Venmo?
Sending Money With Credit May Cost
Venmo is one of the most widely used peer-to-peer (P2P payment platforms, but it has an advantage over one its main competitors, Zelle: Venmo allows credit card transactions.
Like other P2P platforms, Venmo requires you to add a funding source — a place where the service can pull funds to send to your family, friends or merchants. You can directly connect your bank account to Venmo, or you can add a debit card or credit card. Venmo does not charge fees when you pay someone using your bank account or debit card, but fees apply to credit card transactions.
Using a Credit Card on Venmo
Venmo charges a 3% fee when you use your credit card to send money to family and friends. Venmo charges no transaction fee when you pay friends and family using your Venmo balance, bank account, or debit card.
While you can use a credit card to send payments, you can’t transfer funds from your Venmo account to your credit card. Instead, you’ll have to transfer funds to your bank account or your debit card. Note: There’s a fee to transfers funds to your debit card.
Some merchants accept Venmo as a payment method. If you use Venmo to buy something from an authorized business, Venmo does not charge a fee, even if you’re using a credit card.
Venmo’s user agreement states that your credit card issuer may treat a transaction as a cash advance if you use your credit card to pay someone via Venmo. However, that same user agreement also states that it’s a violation of Venmo’s terms of service to use the service to get a cash advance or help someone else do. Given that such transactions are “restricted activity,” it seems unlikely your credit card issuer would treat Venmo transactions as cash advances.
But it is possible, so there are a couple of important things to know:
- Cash advances typically carry an upfront cash advance fee and a higher interest rate. They also immediately begin to accrue interest. You may want to check with your credit card issuer before sending a payment to determine whether the transaction will be treated as a cash advance.
- Because using Venmo for a cash advance violates its terms of service, you could get suspended or permanently kicked off the platform if Venmo thinks you’re using it for cash advances.
Which Credit Card Should You Use on Venmo?
Using a credit card on Venmo to pay family and friends is rarely, if ever, worth it because of the 3% transaction fee. Using your credit card on Venmo can help you reach the minimum spending requirement for the signup bonus on a new credit card. A large signup bonus could outweigh the 3% fee you pay to get it, but there are probably lower-cost ways to reach your minimum spend.
If you’re shopping at a retailer that accepts Venmo, adding your best rewards credit card to your Venmo account could help you make the most of your credit card rewards.
Keep in mind that tiered rewards are based on merchant categories. For example, your rewards program might dictate that in order to earn higher rewards on dining purchases, the transaction must come through with a merchant category code (MCC) tied to restaurants or eating places. The merchant category on Venmo purchases may not come through with dining-related MCCs, meaning you may not earn the maximum amount of rewards. In that case you might just want to use your physical credit card, but having it at the ready on Venmo could come in handy.
There are also some credit cards that allow you to choose the category on which you can earn the most rewards — more than 3%, on some cards — so you could see how your card categorizes Venmo and enroll in that category.
Make sure the card you add to your account has enough available credit for the types of transactions you’ll make so you’ll avoid denied transactions or penalties for exceeding your credit limit.
Venmo limits the number of credit and debits cards you can have on your account in a rolling six month period of time. You can have no more than four active or deleted cards on your account in the past six months. If you remove your fourth card from your account, for example, you may not be able to replace it with another card for a few months. Keep this in miand if you plan to rotate your cards periodically, for example, to max out your credit card rewards.
Protecting Your Venmo Account From Fraud
Since credit cards have stronger fraud protection than debit cards and bank accounts, using your credit card can be more secure than using a debit card on Venmo. Credit cards often have zero fraud liability which prevents you from being accountable for unauthorized purchases made to your card. Adding a PIN to your Venmo account can also make your account more secure.