How to send money with a credit card

Quick insights

• There are many ways to send money using a credit card including cash advances, wire transfers and peer-to-peer payment apps. 
• Cash advances with a credit card are often subject to fees and higher interest rates.
• Some peer-to-peer payment apps do not let users connect a credit card to their account. 

There are many ways to send money that don’t involve physical cash or the post office. Digital wallets and payment apps have opened up a world of possibilities. But long before digital payments became common, credit cards were—and still are—one way to send money. But sending money with a credit card could result in fees and higher interest rates if you aren’t careful. 

In this article, we’ll explain some of the common ways you can send money with your credit card and what to know about each method. 

Sending money with a credit card

When you send or transfer money via a credit card, you’re borrowing against your available credit. You can’t send more money than you have available credit, and most cards typically cap how much you can send. The amount usually corresponds to a percentage of your card's credit limit. 

The money that you send will be subject to interest if not paid off within the billing cycle. Depending on how you send the money, cash from your credit card may be subject to higher-than-average interest rates and fees. 

Ways to send money with a credit card

There are a few ways to send money with a credit card. They include:

Peer-to-peer payment apps

A peer-to-peer payment is a digital transaction that allows users to send or receive money from other people directly using a digital platform or app. Some peer-to-peer payment apps allow users to link their credit cards while others, like Zelle, do not. 

Apps that allow you to connect a credit card may charge a fee for credit card transactions, so you may want to check the terms and conditions first.

Cash advance

A cash advance is a loan offered by a credit card issuer that uses the available credit on your credit card. The cash is deposited in your account, and from there, you can send money to another person. The cash advance amount is then added to your credit card’s balance.

Please be aware that cash advances can be costly, as they typically have higher fees and interest rates.

Wire transfer

A wire transfer is an electronic payment used to transfer funds between bank accounts. Some banks may allow customers to fund wire transfers using a credit card. However, this is often treated as a cash advance, so this method of sending money can also be subject to higher fees and interest rates.

Money order

A money order is a prepaid payment method that allows the payer to provide funds to the payee. Money orders are similar to writing a personal check, but they don't require the payer to have a bank account.

They are commonly sold at post offices, banks, credit unions and some retail stores. However, some establishments may not allow you to purchase a money order with a credit card.

Money orders usually cost a few dollars each, though fees may vary depending on where you purchase. 

Considerations when sending money with a credit card

While using a credit card to send money may be convenient, there could be some potential downsides. Here are some things you may want to consider when sending money with a credit card:

• Fees and interest rates: Credit card transactions often result in fees, especially for cash advances or wire transfers. Additionally, interest rates for these types of transactions are typically higher and start accruing immediately.
• Credit score impact: High credit card utilization, especially if a large amount of money is sent, can negatively impact a person's credit score. 
• Payment plan: Having a plan to pay off the amount you send with your credit card may help you pay less interest over time. 

When sending money with a credit card, you may want to fully understand the terms and conditions of the credit card and the money transfer method.

Alternatives to sending money with a credit card

Some credit card issuers may offer short-term loans with fixed repayment terms using the available credit on your card. The loan amount is added to the card's current balance, with the repayment schedule incorporated into the monthly minimum payment.  

For example, My Chase Loan^® allows cardmembers to choose their loan amount and repayment terms. These loans typically do not require a credit check but may have a minimum loan amount. Interest rates on this type of loan also may be lower than the standard APR on your credit card. 

In summary

There are many ways to send money using a credit card, including peer-to-peer payment apps, wire transfers, cash advances and money orders. Of note, some of these methods may incur fees or be subject to higher interest rates. When getting a cash advance from your credit card, the advance will start earning interest right away. 

Some card issuers may offer short-term loans through your card with fixed repayment terms and interest rates lower than those associated with cash advances or even standard purchases on your card.