Credit cards are not designed to send money, and most methods cost you real money

A credit card is built to let you buy things and pay the bill later. Sending money to another person is not what the card issuer wants you to do, so they have made it expensive or blocked it outright. If you need to move money to someone else, a debit card, bank transfer, or money transfer service will almost always cost less and work faster.

That said, there are a few ways to send money using a credit card if you have no other option. Each one charges you a fee, and some charge you a very high fee. Understanding what each method costs before you use it matters more here than with most credit card decisions.

Key Takeaways

  • Credit card companies charge fees to send money because they make money when you buy things, not when you transfer balances or send cash.
  • A cash advance from an ATM costs an upfront fee plus interest that starts immediately, making it the most expensive option.
  • Peer-to-peer payment apps like Venmo and PayPal let you link a credit card, but they charge a percentage fee for credit card transfers.
  • Bank-to-bank transfers and debit cards cost nothing or much less, so check those options first before using your credit card.
  • Money orders and wire transfers through your bank can work with a credit card but require extra steps and still charge fees.

Cash advances: the most expensive way to get money out

A cash advance lets you withdraw cash from an ATM using your credit card, as if it were a debit card. The money goes into your pocket, and you can hand it to someone or deposit it into their account. But the cost is steep.

You pay an upfront fee — usually 3% to 5% of the amount you withdraw, with a minimum of $5 to $10. So withdrawing $200 costs $6 to $10 right away. Then, interest starts accruing on that $200 the same day. Credit card companies do not give you a grace period for cash advances the way they do for purchases. If your card charges 20% APR, you are paying roughly 0.05% per day on the cash advance balance until you pay it back.

A $200 cash advance that sits on your card for 30 days costs you $6 to $10 in fees plus about $3.30 in interest. That is a real cost for moving money that a bank transfer would move for free.

Peer-to-peer apps: linking your credit card to Venmo, PayPal, or Square Cash

Apps like Venmo, PayPal, and Square Cash let you send money to friends by linking a payment method. You can link a credit card, but doing so triggers a fee. Linking a debit card or bank account usually costs nothing.

If you link a credit card, the app charges a percentage fee — typically 1.5% to 3% — on top of the transfer amount. Sending $100 to a friend costs $1.50 to $3.00. The person receiving the money gets the full amount; the fee comes out of your pocket. This fee exists because the app has to pay the credit card company a processing fee when you use a credit card, and they pass that cost to you.

These apps are fast — the money usually arrives within minutes to a few hours — but they are only practical for small amounts. Sending $500 costs $7.50 to $15 in fees alone. For larger amounts, a bank transfer is free and takes one to three business days.

Money orders and wire transfers through your bank

You can buy a money order at a post office, grocery store, or bank using a credit card, then give the money order to someone or mail it. The person receiving it can cash it at a bank or check-cashing service. A money order costs $1 to $5 depending on the amount, which is cheaper than a cash advance but still a fee for something a bank transfer does free.

A wire transfer through your bank also works. You go to your bank, provide the recipient's account details, and the bank sends the money electronically. You can fund a wire transfer with a credit card at some banks, though many require a debit card or bank account. Wire transfer fees range from $15 to $50, making this option expensive unless you are sending a large amount.

Both of these methods are slower than peer-to-peer apps — money orders take days to arrive, and wire transfers take one to three business days — and both cost more than a simple bank transfer.

Balance transfers: moving money between credit cards

A balance transfer lets you move debt from one credit card to another. This is not the same as sending money to a person, but it is worth understanding because it is sometimes confused with money transfer.

If you have a balance on one card and want to move it to another card with a lower interest rate, you can do a balance transfer. The new card pays off the old card's balance, and you owe the new card instead. Balance transfers usually charge a fee of 3% to 5% of the amount transferred, and the fee is added to your new balance. This is useful for managing debt, not for sending money to someone else.

Why credit card companies make sending money expensive

Credit card companies earn money when you use the card to buy things. A store pays them a percentage of the sale, and that is how they make their profit. When you send money to another person, no store is involved and no merchant fee is paid. The credit card company loses the opportunity to earn that fee, so they charge you directly instead.

Cash advances and balance transfers also carry risk for the card issuer. They are lending you money with no merchant involved to verify the transaction, so they charge higher fees and interest to cover that risk. Peer-to-peer apps charge fees because they have to pay the credit card company's processing fee and need to cover their own costs.

When to use your credit card to send money, and when not to

Use your credit card to send money only when you have no other option. If the person you are sending money to has a bank account, ask them for their account number and routing number so you can do a free bank transfer. If you both have phones, use a peer-to-peer app but link your debit card or bank account, not your credit card. If you need to send cash, use a debit card at an ATM instead of a credit card cash advance.

The only time a credit card makes sense is if you are building credit history and the fee is worth the benefit. For example, if you are rebuilding credit and need to send money anyway, using a credit card and paying the fee might be worth it to add a positive transaction to your history. But for most situations, the fee is pure waste.

Frequently Asked Questions

Can I use my credit card to pay someone's bill directly?

Some billers let you pay with a credit card on their website, but this is not the same as sending money to a person. You are paying a company directly, and they accept credit cards as a payment method. If you want to send money to a friend or family member to help them pay their bill, you would need to use one of the methods above.

What is the cheapest way to send money with a credit card?

A money order is usually the cheapest option if you must use a credit card, costing $1 to $5. But a bank transfer from your checking account costs nothing and is faster. If you do not have a checking account, a peer-to-peer app linked to a debit card costs nothing and is nearly instant.

Does sending money with a credit card hurt my credit score?

A cash advance or balance transfer shows up on your credit report and can lower your score slightly because it increases your debt. Peer-to-peer transfers and money orders do not affect your credit score. The impact is usually small and temporary if you pay the balance quickly.

How long does it take to send money using a credit card?

Peer-to-peer apps are fastest, moving money in minutes to hours. Bank transfers take one to three business days. Money orders take several days to arrive by mail. Cash advances are instant at the ATM but then require the recipient to deposit or cash the money, which adds time.

Can I send money internationally with a credit card?

Some peer-to-peer apps and money transfer services like Western Union accept credit cards for international transfers, but fees are high — often 5% to 10% of the amount plus a flat fee. A bank wire transfer or international money transfer service linked to a bank account is usually cheaper for amounts over $500.