Ways To Pay A Friend With A Credit Card
If youre looking for ways to pay back friends or family without pulling out your wallet, hitting up an ATM, or paying cash advance fees, just look at your phone.
There are a few apps to try out, and dont be afraid to use more than one. Sometimes different friends have different apps, so if you want to make it easier on them, be versatile with the ways you can transfer funds.
Benefits Of Using A Credit Card On Venmo
- When the credit card you’re linking to Venmo is a rewards card, it’s possible to rack up a greater number of rewards, particularly if you use Venmo to pay for everyday purchases.
- Using a credit card means not having to worry about the ebbs and flows of your checking account. So you could use Venmo to pay for things even when your checking account is low.
- Repaying your credit card each month helps build your credit score.
How To Make The Most Of Adding A Credit Card To Venmo
The best reason to add a credit card as your Venmo funding source is to make the most of rewards points. The following steps can help you do that:
- Only use your credit card if you’re making a purchase that won’t incur a fee. Venmo lets you set up separate preferred payment methods. For example, if you’re buying a gift on Etsy from an authorized merchant, use your card and rack up rewards points. If you’re sending money to a friend, switch your payment method to your bank or debit card.
- Keep track of purchases made and money sent using your credit card. You want to avoid two things: running over your credit limit and spending more than you can afford to repay.
- Make sure you’re getting more than you’re giving. Is your primary reason for tying a credit card to your Venmo account to score rewards points? Then be sure to pay your credit card balance off in full each month so you’re not hit with interest payments that cost you more than points or cash rewards are worth.
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Should You Get The Venmo Credit Card
If you already use Venmo and you want an easy-to-manage card with decent ongoing rewards, the Venmo Credit Card could certainly be a contender. The cards seamless user experience makes it feel like the future of credit cards.
But if youre after a lucrative sign-up bonus, you have less-than-ideal credit or you have no desire to use Venmo as a payment tool, you’ll want to look elsewhere.
Venmo Vs Paypal: Accessibility
PayPal and Venmo both have their own free apps for iOS and Android, which is where most users will go to use each service. They both also have browser-based desktop versions. However, Venmo payments can only be initiated with the mobile app, whereas PayPal payments can be made through the app or the website.
PayPal can also be used as payment with a wide variety of online merchants, and even for QR code purchases in-store. Though Venmo is working to build up this merchant transaction capability among more retailers, its reach is currently very limited compared to PayPals very expansive footprint.
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What Are The Risks Of Using Venmo
Like other online applications, there is a chance that your Venmo account could be hacked and your balance emptied. Ways to avoid becoming a victim of theft include making sure you dont share your account information and password, logging out of your account when youre not using it, and refraining from storing large amounts of money on Venmos platform.
Venmo For Business Fees
Using Venmo For Business isnt free, but its pricing structure is simple compared to a standard merchant account. Pricing is also fair and compares favorably with what youd pay to use Square or PayPal. Online rates are identical, whereas Venmos in-person rates are significantly lower than Squares current rate of 2.6% + $0.10 per transaction.
The following Venmo business fees and processing rates are all fully disclosed on the companys website:
- No fee for setting up a Venmo Business Profile
- No monthly account fee
- 1.9% + $0.10 per transaction for purchases made using the Venmo app and a QR code
- 2.9% + $0.30 per transaction for purchases made online or in-app using the Braintree gateway or PayPal Checkout
Venmo is currently running a promotion where your transaction fees are waived for the first 30 days after setting up your Venmo Business Profile. While this is a great deal, be aware that it probably only applies to in-person QR code payments.
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Heres How To Pay A Car Payment With A Credit Card:
- Mobile payment services: One way to pay your car loan or lease with a credit card is to use a mobile payment app such as Venmo or PayPal as a middleman. These applications allow you to transfer money from user to user, and you can fund them with a credit card.
So, for example, you could use your credit card to pay a friend or family member through the app, and they can then make your car payment for you or give you the money to do it yourself. Just make sure you really trust the person, and be careful because payments may count as purchases or cash advances, depending on the service and the credit card issuer. But either way, there are fees involved. Venmo, for example, charges 3% of the transaction amount.
- Money transfer services: Companies like MoneyGram and Western Union allow you to directly pay a collection of participating billers, and you can fund the transaction with a credit card. However, this may be treated as a cash advance, which would mean expensive fees and interest charges would apply, in addition to the fees charged by the service. You can learn more about how this works from our explanation of how to transfer money from a credit card to a bank account.
The bottom line is that these options are far from ideal and should only be considered if youre in a real bind, or if you do the math and somehow find an opportunity to save. That could be the case if youre able to transfer part of an auto loan to a 0% balance transfer credit card, for example.
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*PayPal Credit is subject to consumer credit approval.
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Can I Get Rewards Or Cash Back If I Link My Venmo Account To A Rewards Credit Card
You might, and it pays to check. The platform also lets you add merchant loyalty cards.
If you have a rewards card or loyalty program you use frequently, call the card issuer or program owner and find out how it treats Venmo transactions.
While you could earn rewards for purchases, a credit card might not be the best way to send money to individuals. The fee for using a credit card to send money is 3%. So unless youre getting more than 3% in rewards, youll be paying more than youre earning.Also, ask your card issuer if it treats Venmo payments to friends and family as cash advances. If so, what will that cost? With some card issuers, cash advances mean extra fees and higher APRs for the transaction.
Accepting Credit Cards Can Give Small Businesses A Boost
Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas’ experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.
Running a small business means keeping a tight handle on cash flow. One way to facilitate the movement of money in and out of your business is to expand your payment options to include .
Allowing customers to pay via credit card can make managing cash flow less stressful and eliminate the delays associated with waiting for check payments. If your business isnt yet accepting credit card payments, changing that may be easier than you think.
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How Much Does Venmo Cost
That depends on what you want to do. For example:
- Theres no charge for setting up a Venmo account and sending or receiving money from it.
- Theres also no charge if you link your Venmo account to a bank account or debit card.
- If you link your Venmo account to a credit card, purchases are free, but theres a 3% fee if you use the card to send money to an individual. And your card bank may classify sending money as a cash advance. If thats the case, you could face additional fees, an increased APR on the transaction and no grace period.
- Transferring money from your Venmo balance to your bank account is free for a standard transfer, which takes one to three days, according to the companys website.
- Instant transfers , require an eligible debit card or bank account and carry a 1% fee , according to the site.
The Payment Processors You Should Use Instead Of Venmo
If youre considering accepting Venmo payments because youre looking for an affordable way to process credit cards or to go fully contactless with your payments there are other options that are made specifically for small businesses.
Yeah, OK, were biased. But we created our built-in payment processing specifically for small business owners and service providers. That means industry-low fees and a simple format, plus auto-suggested tips built right into the checkout.
Our built-in payment processor comes with:
- one flat rate of 2.5% + $0.15 per transaction* for every type of payment, including card-present and card-not-present transactions
- next-day funding
- flexible payment methods including prepayments, auto-billing, pay by QR code, pay by text, and more
- contactless and device-free payment options, including Norm
So Whats Norm?
Norm is a contactless payment solution that lets you instantly text customers their total. Clients then finish up payment from their own phones. Its device-free, easy, and secure. The best part? Unlike Venmo, clients dont need to have a special app to use it.
While Norm is similar to Venmos peer-to-peer technology, we designed our contactless payment system specifically for small businesses and their unique needs. That means easy-to-read reports, flexible options to send the bill via QR code or text, and auto-suggested tips at check out.
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What’s The Difference Between Paypal And Venmo
PayPal owns Venmo. PayPal is widely used by businesses and individuals for online transactions. Venmo is used more frequently for peer-to-peer transactions. You can use credit cards on both platforms. PayPal allows significantly higher payments than Venmo and can be used by those living outside the U.S.
Venmo Will Crack Down On Businesses Accepting Personal Payments
Shortly after its launch of Venmo for Business, the company sent out a series of notifications to Venmo users about new policies and fees for business transactions. It appears that Venmo will start enforcing these rules beginning July 21, 2021. Heres a great explainer on Venmos policy changes and what you should do about it.
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How To Transfer Money From Venmo To Your Bank Account
After you have received money from a contact, you should have a balance in Venmo. You can check that balance by tapping your account avatar at the top left. You’ll see a pop-up window display your current Venmo balance.
To transfer your balance to your bank account, tap it, choose how you want to transfer it, and tap “Transfer” at the bottom of the screen. For details on how to do this and when there may be fees involved see our article on receiving money and transferring it from Venmo to your bank account.
The Best Way To Accept Credit Cards For Small Business
As a savvy merchant, youre probably looking for the best and cheapest way to accept credit cards. The bad news is, there is no one-size-fits-all solution.
Heres the good news: if you weigh your businesss needslike the volume of transactions and where these transactions take placeyou should be able to narrow your search down to several providers that offer convenient solutions at favorable rates.
To help you get started, weve compared five of the most popular credit card processing providers for small businesses.
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Welcome Bonus Is A Moving Target
The Venmo Credit Card currently offers bonuses on a limited-time basis. So if you want the bonus, you’ll have to time your application carefully. Other cards consistently sweeten the deal with welcome offers worth $150 or more, which can help offset the annual fee some of them charge. One example is the Blue Cash Preferred® Card from American Express, which offers this welcome bonus: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Terms Apply. The card also earns generous cash-back rates in several common spending categories. The annual fee is $0 intro for the first year, then $95. If that’s too high, consider its sibling card, the $0-annual-fee Blue Cash Everyday® Card from American Express. Its rewards are also useful, though less robust. Terms apply .
How To Use Venmo
2. After the app is installed, follow the instructions in the app to set up your Venmo account.
3. You need to connect your Venmo account to a payment type, such as a bank account, credit card, or debit card. In Venmo, tap the three horizontal lines at the top right of the screen and then tap “Settings.”
4. In Settings, in the Preferences section, tap “Payment Methods.” For details on how to connect your account and verify it so you can start using Venmo, read our article on setting up a Venmo account.
When you add accounts to Venmo, remember that you can send money from a bank account or debit card for free, but Venmo will charge you 3% for payments from a connected credit card.
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How Do Venmo And Paypal Work
The basic functionality and setup of both services are the same. You create a free account with the service, establishing your security credentials. You then link at least one bank account for transfers and optionally add other payment methods, like additional bank accounts or debit and credit cards.
When youre ready to pay someone, you enter or search for their contact info, enter the amount to pay, and choose the payment method youd like to use for the charge. Venmo includes a button to request funds instead of sending them PayPal does not have a “request” button, but still allows you to receive funds.
PayPal and Venmo fund your payments by creating ACH transfers to and from your linked bank account, while those opting to use a debit or credit card will see the payment amount added to your statement like any other purchase.
Are Venmo Payments Protected Against Loss Fraud And Theft
Under new rules, Venmo payments fall under the Electronic Funds Transfer Act, says Saunders.
These are the same regulations that cover debit cards. In cases of unauthorized charges on your Venmo account, if you report the problem to Venmo promptly say, within 60 days you are protected.
However, this most likely wont cover instances of fraud where you sent the money only instances where someone else accessed your account without your knowledge or permission.
If you sent money via Venmo for something that turns out to be a scam , that transaction is not covered under law, says Tetreault. Youre out the money.
Tip: Dont use Venmo to pay anyone you dont personally know or to pay for merchandise you havent received or verified even if you know the seller. And never use it to buy or sell merchandise unless the merchant has been authorized by Venmo.
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Alternative Payment Options For Small Businesses
One convenient choice in situations like this is ACH payments, which move money from the clients bank account to the merchants electronically.
The major accounting software platforms allow small-business owners to turn on the ACH payment feature in their invoices as an option.
Id suggest that if youre already using QuickBooks you go this route. There are low processing fees for ACH payments, making them more cost-effective for merchants. For QuickBooks, the fee to process an ACH transaction is 1%, up to a maximum of $10.
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