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More than 40 million people use the peer-to-peer (P2P) payments app Venmo to make their financial lives more convenient.
The app's so prolific, in fact, that it's become a verb. Splitting a restaurant tab with a friend? "Just Venmo me later." Buying a used desk off Facebook Marketplace? "I'll Venmo you upon pickup."
If you're one of the tens of millions of people who use Venmo in conjunction with your bank account or debit card, you may be wondering whether you can add your credit card too.
The answer is yes, you can use credit cards on Venmo—but before doing so, there are several things you should know.
Should You Use a Credit Card on Venmo?
It's possible to use a credit card on Venmo, but you'll face a few restrictions. For example, you won't be able to add a credit card if it's already linked to another Venmo account, and you won't be able to transfer money from your Venmo balance to a credit card.
Another big difference to keep in mind is that you'll pay a 3% fee to send money on Venmo using your credit card. That's in contrast to using your bank account, debit card or Venmo balance, which is totally free.
Additionally, when you pay your friends and family via credit card, Venmo warns that card issuers could code the transactions as cash advances—which means an additional set of fees, often a minimum of $5 or $10. Cash advances also don't come with an interest-free grace period; they begin accruing interest immediately, sometimes at a higher APR.
When it comes to buying from a business, Venmo transactions may be coded as purchases, thereby avoiding the additional fees and interest. Still, it's worth checking with your issuer before adding a credit card to your Venmo account. Fees won't be charged when using Venmo to purchase an item from one of the company's partner businesses. In that case, the business will cover the transaction fees so you won't have to, even if you're using a credit card.
6 Tips for Using Venmo Safely
Whether you're paying on Venmo with your bank account, debit card, Venmo balance or credit card, you should follow some basic precautions to help keep your money and identity secure.
Here are six tips for using Venmo safely:
- Create a strong password. When it comes to your financial accounts, one of the easiest ways to protect yourself is creating a complex password. Avoid dictionary words, instead selecting a series of lower- and uppercase letters, numbers and symbols.
- Add additional security measures. By setting up a PIN, biometrics and multi-factor authentication, you'll make it much more difficult for fraudsters to gain access to your account.
- Only Venmo those you trust. Venmo's user agreement states you should only transact with "people you know and trust." If you send a stranger money—either due to error or a scam—you'll have a tough time getting it back.
- Stay on top of notifications. Opt into text notifications that immediately alert you to account activity, such as transfers or attempted logins, so you'll know if something fishy is going on.
- Avoid public Wi-Fi. Never sign into your Venmo account while connected to a public Wi-Fi network. Hackers have been known to set up spoof networks or compromise existing ones in order to steal login details and other personal information.
- Go private. With Venmo's default settings, your payment activity is public, offering identity thieves a sneak peek at your financial habits. Changing your settings will keep your transactions private.
If you ever notice a potentially fraudulent Venmo transaction, contact a customer service representative as quickly as you can. The Venmo app has a built-in chat feature you can use to get help.
4 Alternative Mobile Payment Services
Not thrilled with Venmo? No sweat: You've got plenty of other mobile payment services at your fingertips. Here are several other platforms to consider:
Though Google Pay is mostly used for shopping online or in stores, you can also use it to send money to your loved ones. You can't, however, use credit cards to fund such P2P transactions. You can only use bank transfers or debit cards, neither of which will trigger a transaction fee.
Unlike other mobile payment apps, Zelle allows you to send money directly from one checking account to another. The recipient doesn't need to be a Zelle user—and, if your bank is one of its partner institutions, you won't need to download an app. Best of all, sending payments via credit card doesn't incur any fees (though the company recommends checking with your bank or credit union to find out if they charge any extra fees).
Sending money to friends and family is free if the money comes from your PayPal balance or a bank transfer, but if you want to pay with a credit or debit card, you'll get hit with a 2.9% fee (plus a flat charge that can vary). If you're paying in U.S. dollars, the flat charge is 30 cents.
Cash App has several unique features, including the ability to get your paychecks two days early, sign up for a free debit card that works in stores and at ATMs, and invest in stocks or Bitcoin. Just want to send money to friends? You'll pay a 3% fee to use a credit card; transfers funded via debit card or bank account are free.
How to Decide Whether to Add Your Credit Card to Venmo
There's no doubt about it: Venmo and other P2P payment services are incredibly convenient, and often free of charge. Unless, of course, you're using a credit card—in which case you'll usually pay a fee to do so.
When deciding whether to add your credit card to your Venmo account, you'll need to weigh the added security versus the added fee, and decide which one matters more to you.