Credit cards are among the most used payment cards globally, with others being debit cards, prepaid cards, and gift cards. A credit card allows users to borrow finances from the card issuer. After using the card, you have to pay the card’s bill with some interest at the end of the month. The interest is the extra amount of money you spend on top of the borrowed amount. It is the profit the lenders get from your card usage. We shall learn about the various apps to send money with credit card.
Usually, payment cards allow you to fund transactions of various mobile money wallets. Sometimes you may not have enough balance to carry out transactions in your app. Therefore, the cards are not for shopping and withdrawing money only. After all, you are the one to repay the amount you spend at the end of the billing cycle. The only important thing you can do is make sure you use the card per the agreements.
Credit cards allow you to carry out transactions similar to Debit and prepaid cards. You can buy goods and services and withdraw money at an ATM or over the counter with a debit card. With a credit card, you can do the same transactions. The only significant difference is that credit cards allow you to borrow finances from your card issuer, while debit cards allow you to use your checking account balance.
What are the various types of credit cards?
There are two main types of credit cards that you can get today. They include secured and unsecured credit cards. Let us look at each of the cards for a better understanding.
i) Secured credit cards
Secured credit cards allow you to borrow finances from your card issuer only when you deposit some money for security. When recharging, you can make an instant bank transfer without a debit card to your card account. The cards are mainly for building credit, and issuers give them to people with no credit or those with bad credit. The amount you deposit determines your borrowing limit. The more you borrow, the more your borrowing limit and vice versa.
Secured cards charge low-interest rates since there are no many risks associated with the cards. The security deposit helps the card issuer recover their money if you do not repay your card’s bill at the end of the borrowing period. Usually, you get the money back if you attain good scores to give you a good unsecured credit card.
2) Unsecured credit card
Unsecured credit cards usually require credit scores to get them. Credit scores are numerical expressions that show your creditworthiness. When you apply for your card, the card issuer typically checks your scores to see if you qualify for a given card. The more your credit scores, the higher your credit limit, and vice versa.
Unsecured credit cards are the best if you want a card to borrow money for your daily usage. The more you continue using the card in a better way, the more you continue you qualify for a better card.
How to grow credit scores?
Both the secured and unsecured cards allow you to build your scores. You need to use the cards appropriately, and you can see changes. Therefore, the issuers of the two cards usually report your card usage to the credit bureaus. When the bureaus get your borrowing details, they keep them to later come up with your credit scores, and that way, you can increase your scores.
You should observe various practices when using your credit card to increase your scores. They include the following.
- Pay your card bills on time. The payment history accounts for up to 35% of the overall scores.
- Spend far below the credit limit. Financial experts usually recommend spending at most 30% of your credit limit. That way, you can show a good picture to the lenders. Spending too much of your credit limit shows that you can easily default on your loans.
- Have several cards with you. Having numerous credit cards can lead to a faster increase in credit scores since many issuers report your card usage to the credit bureaus.
- Keep your card active. Dormant cards lower your scores since your issuer has no data about your card usage. They report your data to the credit bureaus if you keep your card active, thus leading to a scoring increment.
How do you apply for a credit card?
You can apply for a credit card online or at a physical store. When applying for a card online, you need to present your details such as your Social Security Number, an identification document, an email address, a phone number, and a physical address. If you do not have a checking account with your issuer, all those details are necessary. However, some financial companies do not necessarily require you to have a checking account.
Once you submit the necessary details, you can receive your card at your place. You have to pay the security deposit for secured cards to get them. After receiving your card, you can then activate it for use. If you apply at a branch, you may go home with your card the same day or wait for several days for the card to be ready.
When applying for the card, you should check on the following factors.
- The credit scores are needed for unsecured cards.
- The fees. They include monthly fees, annual fees, foreign transaction fees, late payment fees, etc.
- Interest rates
- Credit limit
What are the best apps to send money with credit card?
Various apps allow you to use them with a credit card. They include the following.
1) PayPal
PayPal is a money transfer service that operates globally. The platform allows you to send and receive money online from different world regions. You can open your account online using your phone, computer, or tablet. The platform allows you to use your balance when doing various transaction activities. However, you can use the balance from your bank account, credit card, or debit card to do your transaction.
You can do various transaction activities with your PayPal accounts, such as buying goods and services, sending money to others, and transferring money to a bank or debit card. By the way, PayPal can help you transfer money from a credit card to a debit card. That is possible if you use the card as the source of money when doing a PayPal to debit card transfer.
To use your card or bank account with PayPal, you should add it to your PayPal account in the following manner.
- Open the PayPal app.
- Tap Wallet.
- Hit Banks and cards.
- Hit on Debit and credit cards.
- Link your card manually.
After linking your card, you can then use it to fund your PayPal transfers.
2) Cash App
Cash App is a peer-to-peer money transfer platform that allows you to send and receive money within the US and the UK. The platform allows you to add your credit card to your Cash App account to use it as a funding source. Like PayPal, you have to add the card to your profile to use it as a funding source for your transaction activities. The following is the process to add your card to the Cash App.
Launch Cash App on your phone.
- Tap the house icon on the screen.
- Choose ” Add Credit Card ” in the “My Cash” menu, and choose “Add Credit Card.”
- Enter your card number.
- Tap “Add Card” on the bottom.
- Follow other guidelines.
After successfully adding your card to your account, you can then use it to fund money transfer transactions to others.
3) Venmo
Venmo is a product of PayPal that allows you to send and receive money in your account. It allows you to use payment cards with credit cards being among them. And by the way, you can send money online with a credit card with no verification once you add it to your account. Like PayPal and Cash App, you should add the card to your PayPal account to use it for your transfers. The following is the process to add the card to your Venmo account.
- Log in to your Venmo account.
- Go to the “You” tab by tapping the single person icon.
- Tap the Settings gear, then tap the “Payment Methods” option.
- Select “Add Bank or card” to proceed.
- Tap the “Card” button.
- Add your card details manually or use your phone’s camera.
How do you transfer funds from a credit card to a bank account?
You may need money in your bank account for various kinds of transactions, but your credit card is the only source of money. It cannot be easy to directly transfer money from your credit card to your bank since many card issuers do not allow that.
That is contrary to debit cards which allow you to manage your account online whereby you can send money and pay bills. One can transfer money from a debit card to a prepaid card online using the prepaid card’s details.
You can use a convenience check to transfer money from your credit card account to your bank account. Also, you can withdraw finances from the card over the counter or ATM and deposit them in your bank account.
Bottom line
A credit card is one of the most used payment cards that most people use worldwide. You can get the card online or at a branch. If you apply for the card online, you must provide your address to receive the card at your place. There are two types of credit cards: secured and unsecured credit cards. You can use a credit card to fund a mobile app transaction.
