The age of using credit cards for money transfers has arrived. It’s not a new thing anymore. You can send your money to people you know, or anyone worldwide, without opening up accounts. And you don’t have to wait for days for the transfer to happen, either!
Here are five things that are good to know about using your credit card for this purpose:
What is a card-based money transfer?
Money transfers are one of the most popular ways to send money overseas. It’s easy, convenient and secure. However, if you’re an ex-pat who lives in a foreign country or someone who frequently travels abroad for work or pleasure, you may want to consider using a card-based money transfer instead of the traditional bank account route.
You might be wondering: what is a card-based money transfer?
Essentially, it sends funds from one bank account directly into another person’s bank account via a credit/debit card (VISA/MasterCard).
Can you use a credit card to send money?
You can use a credit card to send money across borders, but not all cards are accepted. For example, some banks will let you send the maximum amount with no fees, while others might charge for transfers over a certain amount.
If you’re traveling abroad and need to make an international money transfer, it’s essential to know how much your credit card company allows. And if you’re receiving money from friends or family members who live abroad, they must have the right information about how much they can send and receive.
Will the money be instantly available?
The money will be instantly available in the recipient’s account. However, if you have selected ‘Cash’ or ‘Cheque’ as the payout method and your transaction has been processed on a public holiday, it may take two days to reflect in your bank account.
How do you send money using a credit card?
You will need to purchase a money order to send money using a credit card. You can do this by going to the post office and buying one. However, it’s often cheaper if you buy these items at other stores with low prices. So yes, you can buy a money order with credit card, but be careful with the charges you pay for it.
The next step is to fill out the form that comes with your money order. Then all that remains is sending your payment via email, fax or regular mail.
According to financial advisors at Lantern by SoFi, “Money orders are popular because they have several advantages. First, a money order is traceable, unlike cash.”
How do the fees and interest rates compare?
One of the best things about using a credit card for money transfers is that the fees are often lower than other methods. This is because the banks make their money from interest rates on loans rather than fees charged to customers, so they’re willing to offer attractive incentives like no-fee transfers to attract more customers.
Hopefully, you now better understand how credit card money transfers work. Credit cards are easy to make remote payments, but they can also be expensive if you aren’t careful. So if you want to transfer money abroad, it’s best to use your bank account instead!
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