Credit cards are some of the most used payment cards in the world. The cards allow you to borrow funds from your card issuer for your various transaction needs. They are kinds of loans since you have to repay the amount borrowed after the end of the month with some interest. As we shall see, there are various kinds of transactions that you can do with your credit card. You will be able to know how to send money using a credit card within the process.
Credit cards resemble debit cards in many ways, although they differ in that debit cards allow you to use funds in your checking account while credit cards allow you to borrow from your issuer. Both cards help buy goods and services online and at physical stores. You can also enjoy rewards from credit cards as well as debit cards. That way, you can realize the value of your money.
Most credit card issuers allow one to apply for a card online or at a brick-and-mortar branch. The online application process is easy since you can carry out the process from the comfort of your couch or even when traveling. Once your issuer approves you, you can get your card through your physical address. They usually rely on courier companies to dispatch the cards to the applicants. Therefore, you should always crosscheck your address during the application.
Where can I get a credit card?
There are various institutions where you can get a credit card when the need arises. They include the following.
- Credit unions
- Mobile wallets
- Financial technology companies
Banks are the major credit card issuers and other payment cards. The best banks with fantastic credit cards include US Bank, Bank of America, Citi, and Wells Fargo. When it comes to credit unions, we have the First Technology Federal Credit Union, Alliant Credit Union, America First Credit Union, Golden 1 Credit Union, and SchoolsFirst Federal Credit Union.
Mobile wallets that can offer you a credit card include Venmo and PayPal. You need to open accounts with any platform, and you are good to go. The cards function just like any other credit card you can get around. On the other hand, mobile technologies such as Chime and Green Dot issue credit cards online.
The Chime Credit Builder Visa® Credit Card allows you to grow your scores as you enjoy shopping around. Financial technology companies offer services similar to banks, although they aren’t real banks. You can get checking and savings accounts from such institutions.
What are the various kinds of credit cards?
There are two main types of credit cards that you can get today. They include secured and unsecured credit cards. Secured credit cards refer to the cards that require you to pay a security deposit to get them. Usually, the cards are suitable for people with no borrowing history to help them build their scores from scratch.
You only need to apply for the card, pay the required security deposit, then receive the card and activate it for your use. The cards usually give you a borrowing limit depending on your deposit amount.
Some have minimum deposit requirements, while others allow you to deposit any amount you want. For example, the Chime Credit Builder Visa® Credit Card does not have any minimum deposit requirement. Your limit is any amount you feel is suitable for you. A card like the Bank of America® Unlimited Cash Rewards Secured Credit Card requires you to have a minimum security deposit of $300.
Unsecured credit cards are the ones that require you to have a credit history to get them. That means you have at one time taken any loan for your use. If you have a credit history, you have credit/FICO scores. FICO scores are numerical expressions that show a borrower’s ability to repay their loans as per the agreements with their issuer.
The more your scores, the better the credit card that you get. Higher scores give you a high-limit credit card with a low Annual Percentage Rate (APR), and vice-versa applies to credit cards with low scores. Credit scores range from 300 to 850.
How to send money using a credit card?
I promised to show you how you can send money using your credit card, and now it is time to do so. To send money from one bank to the other, we all know that you have to transfer money using the routing and account numbers of the recipient bank account. What about credit cards? Even though you may not be able to send money directly from a credit card, the following ways can assist you in carrying out the process.
i) Use your online card account
Some issuers allow you to manage your card online or use a mobile app. If your card has that capability, you can easily transfer money from your card to your bank account using either wire transfer or ACH. That is possible if the recipient has a bank account.
ii) Use PayPal
PayPal allows you to add a credit card to your account to fund your transactions. Therefore, if you want to send someone funds and the only available source is your credit card, you do not have to worry since PayPal is a convenient platform for the transfer. You can open a PayPal account online using your smartphone, computer, or tablet as long as you have all the requirements.
Venmo is a product of PayPal whereby you can use a credit card to send money to other Venmo users. You must have an active account, create an account with the platform, then add your card as a payment source. You can then send money to someone using money from your card.
iv) Cash App
Cash App is another money transfer service that allows you to fund your transactions with a credit card. Once you create your Cash App account, you can add your credit card, then send money to someone else on Cash App using their username, phone number, or email address.
You can also send money to someone who is not on Cash App, and then they can follow the link sent to them to claim their funds. If you have a question like, can you transfer money from a credit card to a debit card, I can assure you that you can do it indirectly using Cash App or other similar apps.
Since Cash App allows you to transfer funds instantly to a debit card, you can get money from your credit card once you add it to your profile, then initiate a transfer to your linked debit card at a fee. Cash App allows you to transfer money to your bank account, of which the funds will be available for the debit card that links with the bank account.
v) Use a convenience check
A convenience check is a check that you can get from your credit card issuer. The check draws money from your credit limit. Once you get the check, you can send it to the preferred person, who can deposit it in their account or cash it out.
vi) Western Union
Western Union allows you to send money both domestically and internationally. The recipient can collect the money at a location or receive it in their bank account or Western Union online wallet.
Since the platform accepts credit cards, then it can allow you to send money from your credit card to someone else. And by the way, you can use Western Union to transfer money from a debit card to a prepaid card. Western Union allows you to receive money on your prepaid card.
How to use a credit card?
There are various ways you can use your credit card. They include the following.
i) Send money
You have seen the various ways to send money using a credit card. The above methods usually attract fees for the transfer activity. Above all, the card eventually allows you to send money.
ii) Buy goods and services
The main uses of a credit card are to buy goods and services either online or at physical stores. When purchasing at a store, you only need to walk in with your card, select the goods you want to buy, then take them to the register and pay by tapping or swiping on the card reader machine. It deducts the exact amount that you have spent.
When purchasing online, you need to provide the card number, the CVV, and the expiry date and authorize the transaction. Some cards also allow you to make payments online when you log into your online card account and transfer money to the merchant’s account.
iii) Withdraw funds at an ATM point
The card has a PIN that you can use at an ATM point to withdraw funds. However, since you will be getting a cash advance, the practice is usually costly.
Can I use a credit card to send money through Zelle?
Zelle is an online money transfer company that allows you to transfer money across banks instantly. You can even make an instant bank transfer without a debit card from your bank account to another bank as long as you have enrolled in the service.
Also, you can use the Zelle app independently without connecting with any bank. You need to add a US Visa or Mastercard debit card to fund your transactions. However, you cannot add a credit card to Zelle since the platform does not support credit cards.
A credit card is one of the most used payment cards globally. You can get one from a bank, credit union, mobile wallet, or financial technology company. You can have an unsecured or secured credit card, depending on your preferences.
Since the cards are like loans, you have to repay their debts every month with some interest. You can send money with a credit card, buy goods and services, and withdraw money, among other transaction activities.