Do you use Venmo to split bills with your friends or send money to loved ones? It's a popular and convenient way for millennials to handle finances. But did you know that using a credit card on Venmo might come with a fee? In this article, we will explore whether Venmo charges fees for credit cards, explain the fee structure, and even look at alternatives to avoid getting charged. So, if you're using Venmo or planning to sign up soon, keep reading to make sure you're aware of any potential fees!
Does Venmo Charge A Fee For Credit Cards Table of Contents
What is Venmo and How Does it Work?
Does Venmo Charge a Fee for Credit Cards?
What is Venmo and How Does it Work?
Venmo is a mobile payment application that allows you to send and receive money easily, securely, and quickly. It is widely used by millennials as a convenient way to split restaurant bills, pay rent, or send cash gifts. All you need is an email address or mobile number to get started with Venmo.
Does Venmo Charge a Fee for Credit Cards?
Yes, when you use a credit card as your payment method on Venmo, a fee is charged. Venmo imposes a 3% fee on transactions funded with credit cards. This fee is added automatically and is taken out of the amount you’re sending. Debit cards, prepaid cards, and bank accounts linked to Venmo, on the other hand, are not charged any fees for sending personal transactions.
Exceptions to the 3% Fee
- There is no fee when you receive money or make payments to authorized businesses.
- There's no fee for accepting payments, only sending them.
- There's no fee for debit cards, prepaid cards, or bank accounts linked to Venmo for personal transactions.
Why Does Venmo Charge a Fee for Credit Cards?
Venmo charges a fee for credit card transactions to cover the processing costs associated with accepting credit cards. Banks and credit card companies typically charge a fee for each credit card transaction, and this is passed on to the user in the form of a 3% Venmo fee. Since debit cards and bank account transactions have lower processing costs, Venmo does not charge a fee for these payment methods.
Alternatives to Avoid the Venmo Credit Card Fee
If you don't want to incur the 3% fee while using Venmo, you can explore the following alternatives:
- Link a bank account or debit card: Add your bank account or debit card to your Venmo account to avoid the 3% fee. This is the most straightforward way to avoid extra charges.
- Use another P2P payment app: Apps like Cash App, Google Pay, and Zelle do not charge fees for personal transactions using a debit card or bank account. You can avoid the fee by switching to one of these apps.
- Prioritize Venmo's Pay with Bank feature: If you have both a credit card and a bank account linked to your Venmo account, use the "Pay with Bank" feature and the 3% fee will not apply.
Does Venmo Charge A Fee For Credit Cards Example:
Let's say you're using Venmo to send $100 to a friend to split the cost of dinner. If you link a credit card to your Venmo account and make the payment, 3% of the amount, or $3, will be charged as a fee. This means your friend will only receive $97.
To avoid this fee, you could link your bank account or debit card to your Venmo account instead. If you use these alternative payment methods, your friend will receive the full $100, and you will not incur any additional fees.
By being aware of the fees associated with sending money via Venmo using a credit card, you can make informed decisions about which payment method to use. Always consider the alternatives and choose the right one for your needs. If you found this article helpful, don't forget to share it with friends and family, and explore Flik Eco for more financial tips, tricks, and guidance. Stay savvy!
