Venmo has become one of the most popular ways to transfer money between individuals. Venmo allows payments to be made between different individuals all over the world, allowing a seamless and straightforward payment process that benefits both the payer and the payee.
In this article, we will delve into the basics of Venmo, including how it operates and how it differs from other payment methods. We will also address the fees associated with using Venmo and how they impact your money transfers.
Venmo: The Basics:
Venmo is a payment app that allows users to transfer money between individuals with just a few taps on their smartphones. To use Venmo, you must have an active Venmo account that is linked to your bank account or debit card.
When you transfer money using Venmo, the funds are taken from the funding source you have designated in your account settings. Venmo also has a mobile app that makes it easy to make payments on the go.
Users can also link their credit cards to their Venmo accounts, allowing them to make purchases using their credit card balances, in addition to their bank account and debit card transactions. This feature is beneficial because it enables individuals to make purchases they may not be able to afford immediately.
Fees associated with Venmo:
Venmo charges a transaction fee when sending money via credit card. The fee is 3% of the total transaction amount.
Additionally, if you are taking a cash advance from your credit card, the transaction will incur a cash advance fee. Venmo does not charge a fee for debit card transactions or bank account transfers.
However, it’s essential to realize that some banks may charge for insufficient funds if a Venmo transfer causes an account to go into overdraft. Credit Cards and Venmo:
Many people have been curious about how credit card companies categorize Venmo transactions.
Venmo transactions are typically coded as purchases, but how your credit card company treats such transactions varies between card issuers. Here’s what you need to know about the most popular credit card issuers:
1.
American Express: Venmo transactions are typically coded as purchases and are not subject to cash advance fees. 2.
Bank of America: Venmo transactions are usually categorized as purchases, but balance transfers and cash advances can be coded differently, depending on the circumstances. 3.
Barclays: Venmo transactions are coded as purchases, and cash advance fees will not apply. 4.
Capital One: Venmo transactions are categorized as purchases, and cash advance fees are unlikely to be charged. 5.
Chase: Venmo transactions are coded as purchases; cash advance fees typically don’t apply. 6.
Citibank: Venmo transactions are usually categorized as purchases; cash advance fees may be waived for some cards. 7.
Discover: Venmo transactions are coded as purchases, and cash advance fees will not apply. 8.
U.S. Bank: Venmo transactions are classified as purchases, and cash advance fees are unlikely. 9.
Wells Fargo: Venmo transactions are coded as purchases, and cash advance fees are typically not charged. Best credit cards for Venmo:
Now that you know how Venmo transactions are coded by credit card issuers, it’s essential to choose the right credit card to use with Venmo.
Here are some credit cards worth considering:
1. Blue Cash Everyday Card: This card offers 3% cashback on purchases made at U.S. supermarkets (up to $6,000 per year in purchases, then 1%).
Cardholders also earn 2% cashback at U.S. gas stations and select U.S. department stores, making it a great choice for everyday use. 2.
Blue Cash Preferred Card: This card offers 6% cashback on purchases made at U.S. supermarkets (up to $6,000 per year in purchases, then 1%), 6% cashback on select U.S. streaming services, 3% cashback at U.S. gas stations and on transit, and 1% cashback on other purchases. This card is particularly beneficial for frequent supermarket shoppers.
3. American Express Gold Card: This card offers four points per dollar on restaurants worldwide and U.S. supermarket purchases (up to $25,000 per year, then 1 point per dollar), three points per dollar on flights booked directly with airlines or amextravel.com, and one point per dollar on all other purchases.
This card is an excellent option for food and travel enthusiasts. 4.
Platinum Card from American Express: While it has a hefty annual fee, this card offers plenty of perks, including $200 airline fee credits, $100 Saks Fifth Avenue credits, and access to airport lounges worldwide. Cardholders also earn five points per dollar on flights booked directly with airlines or amextravel.com and one point per dollar on all other purchases.
Conclusion:
In conclusion, Venmo has revolutionized the way we transfer money to one another. Understanding the basics of how Venmo operates, its associated fees and how credit card companies categorize Venmo transactions is critical in determining how to use the app most efficiently.
With the right credit card in your wallet, using Venmo can help you earn a significant amount of rewards and cashback opportunities. By using the information provided in this guide, you can optimize your Venmo transactions and make the most out of this app.
3) Debit Cards and Venmo:
In recent years, Venmo has introduced new features that allow users to connect their debit cards to their accounts. Although using a credit card on Venmo allows users to earn rewards and cashback, there are also benefits to using a debit card.
In this section, we will discuss the rewards and advantages of using a debit card on Venmo. Rewards for using debit cards on Venmo:
Several debit cards offer rewards for using them on Venmo transactions.
One of these options is Aspiration, which is a sustainable bank offering a cashback program called Aspiration Plus. Aspiration Plus provides users with up to 5% cashback on debit card purchases and ATM withdrawals.
Similarly, Stash also offers a debit card with rewards. The card provides cashback for online purchases with select retailers and offers rewards for immediate transfers to Venmo accounts.
Another debit card that provides rewards when using Venmo is the Stock-Back card, a debit card offered by the trading app Robinhood. The card provides users with 0.5% stock in the company of the retailer in which the purchase was made.
The Stock-Back card is connected directly to the user’s Venmo account, and the cashback can be applied to Venmo transactions, making it an excellent option for individuals looking to earn rewards while using Venmo. Venmo card is another alternative that is issued by Venmo itself.
This card can be used to make purchases at any merchants that accept Mastercard. Venmo cardholders can earn 3% cash back at eligible merchants, 2% at other eligible online merchants, and 1% on non-matching Venmo debit card transactions.
Advantages of using debit cards on Venmo:
One of the most significant advantages of using a debit card on Venmo is that there are no transaction fees associated with it. This is because the money transferred on Venmo from a linked bank account or debit card is not a cash advance, unlike a credit card.
Additionally, when transferring money via a linked bank account, there is no need to wait for funds to clear as there is no lag time with a debit card transaction. This makes it ideal for people who need to transfer funds quickly.
4) Comparing Venmo and Cash App:
Venmo and Cash App are two of the most popular peer-to-peer payment apps available. Both apps allow users to send and receive money, making them convenient payment options.
But there are differences between the two apps. In this section, we will compare Venmo and Cash Apps features and functionalities to help determine which app works best for you.
Features of Venmo and Cash App:
Venmo and Cash App share the primary feature of enabling users to send and receive money. Both apps allow users to make transactions through linked bank accounts and credit cards.
Venmo also allows users to use their debit cards. Additionally, both Venmo and Cash App have venture into offering cryptocurrency purchases.
Venmo allows users to buy and sell cryptocurrencies through its app, while Cash App allows users to buy and sell bitcoin. Venmo and Cash App also offer a debit card option.
Venmo cardholders can transfer money earned through the card’s cashback rewards directly into their Venmo account. The Cash Card by Cash App is visa enabled and can be used to make purchases or ATM withdrawals.
Differences between Venmo and Cash App:
The most significant difference between Venmo and Cash App is how they handle payments. Venmo transactions are free when made from a linked bank account or debit card.
However, a 3% transaction fee is charged when paying with a credit card. Meanwhile, Cash App charges 3% for transactions made with a credit card.
Another distinction between Venmo and Cash App is their features. Venmo, as mentioned earlier, offers cryptocurrency purchases, while Cash App provides a bitcoin investment and Cash Boost, a cashback program for select merchants.
Additionally, Cash App’s Boost program allows users to enable cashback rewards in various categories of their choosing, while Venmo only offers cashback rewards through its debit card program. Lastly, both Venmo and Cash App offer unique advantages when it comes to sending and receiving money.
Venmo is a great option for individuals who need to transfer funds quickly, while Cash App is a better choice for users who desire rewards programs and investments. In conclusion, both Venmo and Cash App are excellent payment apps that provide convenience and security in sending and receiving money.
Understanding their differences and features is essential in determining which app works best for you. Consider your payment patterns, transaction fees, rewards programs, and investment opportunities when deciding on the best platform for your needs.
5) Venmo: Conclusion
In conclusion, Venmo has become an incredibly convenient and popular way to transfer money between individuals. However, like any financial service, it’s essential to understand the fees and limitations associated with the app.
In this final section, we will discuss some overall recommendations for using Venmo safely, minimizing fees, and optimizing rewards. Transfer Money Safely:
When using Venmo, it is crucial always to ensure that you are sending money to the correct person.
To avoid sending money accidentally to the wrong recipient, always double-check the recipient’s information before submitting the transfer. Additionally, it’s best to discuss with the recipient first and confirm the amount, adding extra security to the transaction.
Finally, never share your Venmo login information with anyone, and always keep your account password secure. Minimize Fees:
One way to minimize fees with Venmo is by linking your bank account or using your debit card instead of credit cards.
This ensures that you avoid the 3% transaction fee associated with credit card transactions. However, it’s important to note that some banks may charge overdraft fees if Venmo transfers exceed the account’s balance.
Therefore, it’s essential to keep adequate funds in your account to avoid such charges. Optimize Rewards:
If you’re looking to optimize rewards while using Venmo, consider using debit cards that offer cashback programs, such as Aspiration, Stash, or Robinhood Stock-Back.
Venmo cardholders can also benefit from cashback rewards, which can be transferred directly into their Venmo account. Additionally, if you’re using a credit card, be sure to choose one that offers substantial rewards, such as the American Express Gold Card or Blue Cash Preferred Card.
Furthermore, Venmo also offers cashback rewards when making purchases with select merchants through Venmo’s app and its debit card program. Users can also collect Venmo rewards points, redeemable for discounts, coupons, and instant cash rewards.
Venmo, like any other payment platform, has its limitations and drawbacks. Despite this fact, it remains one of the most popular digital money transfer platforms.
By following the tips outlined in this guide, you can get the most out of Venmo while minimizing fees.
Overall, Venmo is a secure, convenient, and easy-to-use option for sending and receiving money.
Whether you’re using it to split a bill with friends, pay rent, or purchase goods and services, knowing how to use Venmo safely, minimize fees, and optimize rewards will make your experience with the app even more enjoyable. In this article, we explored the basics of Venmo, including how it works and its associated fees.
We also compared Venmo to Cash App and discussed the advantages of using debit cards on Venmo, including rewards and avoiding transaction fees. Finally, we provided overall recommendations for using Venmo safely, minimizing fees, and optimizing rewards.
Venmo is a popular digital money transfer platform that offers financial convenience. By understanding its benefits, risks, and limitations, you can make the most of its features while ensuring the security and privacy of your transactions.
Remember to choose the right payment methods, pay attention to fees, and optimize rewards programs to maximize your experience with Venmo.