Digital Payments Fintech Remitly explains how to send money abroad even when you don’t have cash, using credit cards
Personal finance specialist Joyce Chou Note that there are ways to send money when needed, even when you may not have enough cash in your savings or checking account. Chou writes in a blog post posted by Remitly, a cross-border payment service, that you might be just days away from payday and a sudden emergency arises in your home country. Or maybe you might not have had the chance to visit an ATM for some unexpected financial problem.
Either way, if you don’t have enough cash, it’s still possible to send funds to a friend or family members using your credit card, Chou explains. She also mentions that money transfer services like Remitly make it easy to send money abroad with a payment card.
Chou points out that if you want to use a credit card to send funds online to a local or overseas recipient, Remilty can walk you through the process.
Chou explains that before you start sending money with your credit card, it’s important to know that these transactions are typically treated as cash advances by financial service providers. For consumers unfamiliar with this term or concept, you can think of cash advances as a short-term loan from your credit card provider, Chou noted.
She added that “in other words, by taking a cash advance, you are essentially borrowing money from your card’s line of credit, which comes with transaction fees.” She confirmed that you will find that the interest rate on cash advances is generally higher than that of other fees.
She further noted that, depending on your credit card provider, this could be a certain percentage of the total transaction amount or a fixed charge (usually, whichever is greater). Chou also mentioned that we should always check with the finance department regarding their transaction fees so as not to have any surprises.
“With these additional costs, it may be better to wait until you have cash and can send money with your debit card. This is because your debit card is drawing from your checking account, which means you can’t spend more than you have (without incurring an overdraft fee, that is). As convenient as it is, transferring money to a bank account using a credit card should be considered a last resort or emergency. “
While there are many money transfer services out there, not all of them allow customers to send funds using their Visa, MasterCard, or other type of credit card. For example, the Zelle service only accepts payments made through linked debit cards and checking and savings accounts, explains Chou.
Services that use credit cards as a method of payment and that can be used to send money to recipients in the same country as you include: PayPal, Venmo, Cash App, among others.
(Note: For more information on these services, see here.)