How to send money using a credit card on a P2P platform
In general, there are 3 steps to send money on a P2P platform using your credit card.
Choose a platform
Select a platform that best fits your needs. Some of the factors you may consider include:
- Whether you’re sending a domestic or international transfer
- Which platforms are available to your recipient
- Fees associated with your planned transfer
Once you choose your platform, you can create an account, if necessary. That typically means providing your email, phone number or a valid social media account.
Link your credit card
Next, you’ll need to link your credit card to the platform. This typically means adding your credit card number, its expiration date and its card verification number (CVV). Depending on the platform, you may need to link a debit card to the platform before you’ll see the option to add a credit card.
Complete the transaction
Finally, to complete the transaction, you must initiate the money transfer on the platform and add the recipient’s details (such as their username, phone number or email address). Usually, the money transfer platform will ask you to confirm the transaction details before officially sending the money.
Be sure to check all the information you’ve provided to help ensure a successful transaction. It may also be a good idea to confirm with your recipient that they received the money transfer.
Fees and costs involved
Common fees for sending money with a credit card could include:
Transaction fees
Some platforms may charge a fee for sending money. Transaction fees may include flat fees (such as $0.30), a percentage of the total payment or both. Research the fees associated with the platform beforehand so you can be prepared to pay them.
Fees for international transfers
An international transfer occurs when you send money to someone who resides in a different country than you. If you send money to an international recipient, the platform may charge a higher fee for that transfer. International transfer fees vary by platform and may include exchange rates if the country uses a different currency.
Cash advance fees
A cash advance fee may be charged if the issuer considers the money transfer a cash advance. It’s important to know whether your credit card issuer will consider using your credit card for wire transfers as a cash advance because there may be a different APR associated with cash advances.
Risks and considerations
It’s important to know and understand the risks associated with using a credit card for money transfers, such as:
Accruing interest
Using a credit card to send money can lead to interest charges, which means you may spend more money in the long term. To minimize this, pay off any balance on your credit card as soon as possible or before the statement balance due date. Note that if your issuer considers a transfer a cash advance, interest will likely start accruing right away.
Impact on creditworthiness
If you send money with a credit card without paying your balance off in full, it could increase your credit utilization (the amount of available credit you’re using). That may negatively affect your credit.
Security concerns
When sending money with a credit card, take the necessary precautions to avoid scams and ensure safe transfers. Always confirm the details of the recipient you’re sending money to.
Alternatives to sending money with a credit card
If the risks associated with using a credit card to send money outweigh the benefits, you may want to consider alternative methods such as bank transfers and credit card loans.
Bank transfers
If you have the funds available, you can use an automated clearing house (ACH) transfer from your checking or savings account to send money for certain transactions. These are often free (or low-cost) and typically take 1 to 3 business days to clear.
To initiate an ACH transfer, you will need to know the recipient’s name, routing number and account number, as well as the payment amount.
Credit card loans
Some credit cards may offer the option to borrow money from your existing available credit. You could send those funds, potentially for free, using an ACH transfer. For example, Citi® Flex Loan can provide funds directly to qualifying cardmembers’ bank accounts and come with a fixed interest rate during the repayment period. (That means you’ll know exactly how much you’ll pay for that loan, while credit cards typically have a variable interest rate which is less predictable.) There’s also no application, credit inquiry or origination fee. Just keep in mind that borrowing this way would add to your credit card balance and therefore increase your utilization.
While there are ways to send money with a credit card, it’s worth considering other options before deciding. That way, you can understand exactly how much money that transfer is going to cost and see if there are any savings opportunities.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
