How to Pay a Friend With A Credit Card (It’s Easy, But There Are Fees)

I have a confession to make: I pay for virtually everything with credit cards. There are very few instances when I use cash, like when I deposit a quarter to get a shopping cart at Aldi, but for the most part, I’m an all-credit fan. I love credit card rewards and the security features of this mode of payment.

However, I wouldn’t always use a credit card if I needed to pay a friend or family member back for something. Though apps like Cash App and Venmo make it easy to do so, I’ll always factor in the added fees before paying that way.

If you do a lot of dining out with friends or maybe you’ve planned a summer trip with your college buddies, you’ve probably run into this issue. You can pay each other with a credit card, but you should always think about the added fees most payment platforms charge.

3 ways to pay a friend with a credit card

If you’re looking for ways to pay back friends or family without pulling out your wallet, hitting up an ATM, or paying credit card cash advance fees, just look at your phone.

Chances are good that like me, you feel like something’s missing if you ever leave home without your phone. You can make it easier on yourself and your friends by having one or more peer-to-peer payment apps on your phone. It’s also helpful if you need to send money to someone without a bank account.

Paying by credit card is also appealing if you’re trying to earn rewards points or a welcome bonus. In this case, you need to do a little math to figure out if the fees for credit card payments outweigh the potential benefits.

You might have some friends who use Cash App while others stick with Venmo or PayPal, and you can use any or all of them to put these repayments on credit. I’ve probably had less than ten occasions when I needed to pay a friend using one of these apps, but it’s sure helpful when those times come up.

Here are the three main payment apps that enable credit card payments.

Cash App

Cash App is free to download and accepts credit and debit cards. It’s the No. 1 finance app in the App Store and boasts a 4.8 star rating based on 6.8 million ratings.

I’ve mainly used Cash App for earning rewards at local coffee shops, but the app is fairly easy to use for transferring money to friends and family.

You can send or request money using a $Cashtag, which is a unique identifier so you can make private and secure payments. You can use a credit card to send money, but there’s a 3% transaction fee. Visa, American Express, MasterCard, and Discover are supported.

After downloading the app and creating an account, enter the dollar amount you want to send and set up who it goes to. The person you’re sending money to also needs the app, and you’ll have to enter their phone number, email, or $Cashtag to make sure your money gets to the right person.

Learn more in our Cash App review.

Venmo

Venmo requires that you be physically located in the U.S., have a U.S.-based cell phone, be 18 or the age of majority for your state, and have an updated Venmo app version.

It’s free to use, and there’s no charge for transferring money with a debit card.

If you’re traveling with friends or need to pay a friend with a credit card via Venmo, you’ll need to tack on another 3% in fees. (In other words, if you’re doing this only to earn credit card rewards that pay 2% back, your fee will exceed your cash back.)

I have to admit that I’ve used Venmo to pay with a credit card before, in spite of the fee, simply because I was too lazy to add a bank account before transferring the funds. I wouldn’t recommend it on a regular basis, but if you just want the convenience of paying this way and the fee is affordable, it’s a valid option.

As with Cash App, both you and the friend you’re sending money to need to have the Venmo app in order for you to send the payment.

One big differentiator is that Venmo allows you to view public transactions via a newsfeed. You can check up on what your friends and family are paying for, if they allow it to be public (there’s a private option on the transaction if you choose).

You should be aware that some credit card issuers code Venmo transactions as cash advances, which incurs additional fees. Venmo claims to warn you before you confirm this type of payment, but it can’t specify how much or whether cash advance fees apply. You’ll want to contact your credit card issuer to find out what it would cost you to use their card on Venmo.

Venmo Amex Send & Split

There is one exception to the 3% fee for credit card payments on Venmo. If you have an American Express credit card, you can send money for free using Amex Send & Split.

To use this option, you’ll need to get the American Express app and link it to your Venmo account. Then you can send money to other Venmo users with an Amex Send account without incurring the typical 3% fee for credit card Venmo payments.

Plus, since we’re talking about paying friends, you can use your Amex to split purchases with someone else. You’ll get reimbursed with a statement credit to your American Express account.

PayPal

If you have PayPal instead of Cash App or Venmo, you’ll be glad to know you can also pay via credit card on PayPal. The fee is comparable, too.

You’ll need to sign up for a free account and link a credit card to send money. Paying with a credit card will cost you 2.9% plus 30 cents for each transaction (or more if there’s a currency conversion).

The friend you’re sending money to will also need a PayPal account. I’ve used it to purchase from a friend’s small business, and it’s a really nice option to have so the other person doesn’t need a separate sales website.

You may also be charged a cash advance fee by your credit card issuer for a card payment funneled through PayPal, which could make this an expensive option.

3 ways to pay a friend with a debit card or bank account

One great thing about the three apps discussed above is that while they do allow credit card payments, they also are set up for free debit and bank transfers. So unless you’re trying to meet a minimum spend requirement on a new credit card or the rewards will exceed the 3% in fees, you’re typically better off linking your bank account to Cash App, Venmo, or PayPal.

These are a few other ways you can send payment to friends, but by using your debit card or bank account.

Apple Pay

If you’re a die-hard iPhone user, you may wonder if you can send money to friends with Apple Pay. You can actually use any debit or credit card that you add to your Apple Wallet, as long as it’s a supported card from a participating card issuer, but that only applies to purchases, not peer-to-peer payments.

You can send money using a linked debit card or your Apple Cash account. No fees will apply, so the cost is the same as if you used a debit card on Cash App, Venmo, or PayPal.

Google Pay

The Google Pay app allows you to send money to anyone with a phone number or email address. If you’re sending money to another person, Google Pay only allows using a debit card or bank account.

The friend you transfer money to doesn’t need the Google Pay app, but they’ll need a Google account. Your friend will get an email or text once the money is sent and will have to use their Google account to log in and claim their cash.

Zelle

To start using Zelle, you may not even need the app. If your bank or credit union allows you to send money with Zelle, you can use your bank’s app to do it. If your financial institution doesn’t offer Zelle, you can download the app to send money. (Check out Zelle’s full list of partners to see if your bank is eligible.)

The friend you’re sending money to doesn’t need to belong to the same bank as you for you to initiate the payment. If your friend already has Zelle (or their bank partners with Zelle), they can get their money within minutes. If they don’t have Zelle, they can download the app, sign up, and enter the banking information where they want the money to go.

Zelle notes that while it does not charge any fees to send or receive money, you might want to confirm with your bank that it doesn’t charge fees for Zelle transactions.

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Read our Zelle review for more information.

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Are the fees worth it?

Venmo, Cash App, and PayPal all charge fees to use a credit card. While normally it’s great to earn rewards by using credit, it’s not necessarily worth it in this case. Before paying your friend with a credit card, consider how much extra you’re paying to do so.

For example, Cash App charges a 3% transaction fee to use a credit card. That means on a $100 payment to a friend, you’ll pay $3 in fees.

When I paid my friend back on Venmo for a shared travel expense of $200, the 3% fee meant it cost me $206. I was okay with that, but it was pure laziness on my part to not add a bank account and avoid that fee.

Should you use payment apps linked to credit cards fairly often, those fees can add up: Just $6 in fees every month is $72 a year. That’s a decent chunk of change for the courtesy of paying with a credit card — especially since linking your bank account is typically free.

If you prefer to pay a friend with your credit card because you can earn rewards and points, do the math to make sure you’re not spending more than you’re earning by using this payment method.

If you pay 3% in transaction fees but only earn 1.5% back in rewards from your credit card company, you’re coming out behind. Even more so if you don't pay off your balance and what you paid your friend becomes subject to high interest rate charges. In that case, it might make more sense to use a debit card to pay friends back for free.

Cash advance fees

There’s also a potential cash-advance fee to watch out for. PayPal, for example, explains that using a credit card for a personal transaction on PayPal may result in your credit card issuer charging you a cash-advance fee. The same is true for Venmo credit card payments to friends.

This is a double whammy on your total cost, so consider that before using credit cards on these apps (my mother-in-law recently tried that, and it was an unpleasant surprise to learn of the added charges).

FAQs

Bottom line

I’m all for responsible credit card use for the security features and rewards-earning potential. But using your credit card to pay friends probably isn’t worth the added fees when you’re on peer-to-peer payment apps.

If you trust your friends (I hope you do), you might offer to put the entire bill for dinner out on your own rewards credit card, then let your friends pay you back in whatever way you prefer. Then you can earn credit card points on your group’s entire bill — and you won’t be stuck with costly transaction fees.

If you find yourself owing friends — instead of them owing you — look into using debit cards instead of credit cards. That way, you won’t get hit with high fees just for the sake of using a credit card.

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