Can you set up venmo with a credit card

Nicole Dieker has been a full-time freelance writer since 2012—and a personal finance enthusiast since 2004, when she graduated from college and, looking for financial guidance, found a battered copy of Your Money or Your Life at the public library. In addition to writing for Bankrate, her work has appeared on CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker spent five years as writer and editor for The Billfold, a personal finance blog where people had honest conversations about money. Dieker also teaches writing, freelancing and publishing classes and works one-on-one with authors as a developmental editor and copyeditor.

Venmo is a payments app that lets you send money anywhere you need it to go. Want to pay the person who cuts your lawn but don't have cash on hand? Venmo allows you to send the funds directly to that person's bank. While Venmo is frequently used to pay for goods and services, you can also use it to send money to friends and family without having to come up with cash or pull out (and dust off) the checkbook.

Venmo was created by college roommates who wanted to make their own lives easier by paying each other via their smartphones. The startup was acquired by PayPal in 2013 and took off from there. Today, more than 60 million people across the U.S. use the app to make payments.

As a company, Venmo has expanded. Not only can it be used as payment on any website that accepts PayPal, but there is also a physical Venmo debit card that lets you get cash from your Venmo account at an ATM or pay for purchases in person. There's also a Visa-branded Venmo credit card, although it's currently available to select customers only.

Learn more: Read our Venmo review

Can you use a credit card on Venmo?

Absolutely. To use Venmo, download the app on your iPhone or Android device and set up an account. During setup, you'll be prompted to enter a funding source. This funding source is where the money will be drawn from whenever you pay someone using the Venmo app. You can choose to link a bank account, debit card, gift card, prepaid credit card, or traditional credit card.

Should you use a credit card on Venmo?

There's no right or wrong answer regarding whether you should use a credit card on Venmo. Your decision depends on several factors, including why you're choosing to fund Venmo payments through a credit card rather than your bank account. Here are some of the benefits and drawbacks of adding a credit card to Venmo.

Benefits of using a credit card on Venmo

• When the credit card you're linking to Venmo is a rewards card, it's possible to rack up a greater number of rewards, particularly if you use Venmo to pay for everyday purchases.
• Using a credit card means not having to worry about the ebbs and flows of your checking account. So you could use Venmo to pay for things even when your checking account is low.
• Repaying your credit card each month helps build your credit score.

Drawbacks of using a credit card on Venmo

• It's possible to overspend your credit limit and incur fees from your credit card company.
• Tying a credit card to Venmo makes it easier to get into debt.
• You will be charged a 3% fee for sending money to friends and family using a credit card as your Venmo funding source.
• Your credit card company may view the money you send to friends and family as a cash advance. That typically means a fee of 3% to 5%, and interest begins accruing immediately. It could also mean paying a higher interest rate on the funds sent.

Requirements to open a Venmo account

You must meet these requirements to open a Venmo account:

• Be physically located in the U.S.
• Have a U.S. cellphone that can send and receive text messages.
• The number you're using can't be on file with another Venmo account.
• You must be at least 18 (or the age of majority in your state).

How to make the most of adding a credit card to Venmo

The best reason to add a credit card as your Venmo funding source is to make the most of rewards points. The following steps can help you do that:

• Only use your credit card if you're making a purchase that won't incur a fee. Venmo lets you set up separate preferred payment methods. For example, if you're buying a gift on Etsy from an authorized merchant, use your card and rack up rewards points. If you're sending money to a friend, switch your payment method to your bank or debit card.
• Keep track of purchases made and money sent using your credit card. You want to avoid two things: running over your credit limit and spending more than you can afford to repay.
• Make sure you're getting more than you're giving. Is your primary reason for tying a credit card to your Venmo account to score rewards points? Then be sure to pay your credit card balance off in full each month so you're not hit with interest payments that cost you more than points or cash rewards are worth.

Alternatives to Venmo

Venmo is not the only payments game in town. Here are three alternatives.

1. Google Pay

You can use Google Pay in much the same way you use Venmo. While it can typically be used to make purchases without incurring a fee (unless the merchant charges a fee of its own), you'll likely incur a small fee if you use a credit card or debit card.

2. Apple Pay

Apple Pay allows you to link your credit or debit card to a digital wallet. It's free to use Apple Pay at the register, at least from Apple's end. If a merchant charges for the use of credit cards, they won't make an exception for Apple Pay. Like Venmo, if Apple Pay is linked to a credit card and you use it to transfer money to an individual, you'll be hit with a small fee.

3. Zelle

Zelle will not charge you to send money through their app, but you'll need to check with your bank to ensure it won't charge a fee. Before downloading the app, check if your bank offers Zelle. Most do.

As long as you set up separate preferred payment methods when you sign up to be a Venmo user, you're likely to appreciate the convenience of being able to pay on the go. No matter where you are, you can make a Venmo payment without breaking a stride, and in today's busy world, that's value-added.

Why can't I use my credit card on Venmo?

Can I use Venmo without a bank account?