Whether you were at a recent celebration or had to borrow money for an emergency, you’ve probably found yourself needing to pay your friends back at some point. If you don’t have enough cash on hand, don’t fret: You can pay a friend with a credit card, though it may cost you in fees.
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 or hitting up an ATM, just look at your phone.
There are a few apps to try out, and don’t be afraid to use more than one. Sometimes different friends have different apps, so if you want to make it easier on them, be versatile.
1. Cash App
The Cash App, formerly known as Square Cash, is free to download and accepts credit and debit cards. It’s the No. 1 money app in the App Store, with more than 35 million downloads.
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. The app is free to use otherwise.
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.
Venmo requires you to sign up for an account through Facebook or your email. But it’s free to use, and there’s no charge for transferring money with a debit card. There’s a 3% fee for sending money with a credit card, though.
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).
PayPal is one of the oldest services for electronically sending and requesting money. 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. It’s a little less user-friendly compared to your other options, especially since PayPal offers so much more than sending electronic payments to friends. Most of its services are geared toward business.
3 ways to pay a friend with a debit card or bank account
While Cash App, Venmo, and PayPal all offer debit card transactions at no extra cost, they are the few that allow credit card payments as well.
If you don’t have a credit card or want to save on transaction fees, you have the option of adding a debit card or bank account to send money to friends.
1. Apple Pay
Earlier this year, Apple discontinued person-to-person credit card payments, but you can use debit cards to transfer money to someone else.
If you have an iPhone, you have a fairly instant way of sending money. In Messages, you can tap the Apple Pay button in a text conversation with the friend you want to send money to. Enter the amount, then approve the transaction using Touch ID or Face ID.
As long as your friend also has an eligible Apple device with a linked debit card or Apple Cash, the payment is seamless. Your debit card is added to your Apple Wallet so you can avoid manually entering card information when it comes time to send a payment.
2. 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’re sending 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.
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 bank 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.
Are the fees worth it?
The apps listed above all charge fees to use a credit card. Before paying your friend back with a credit card, consider how much extra you’re paying to do so.
For example, the 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.
Should you use the app 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 using a debit card is typically free.
If you prefer to use 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. If you pay 3% in transaction fees but only earn 1.5% back in rewards, you’re coming out behind. In that case, it might make more sense to use a debit card to pay friends back for free.
While using a credit card to pay friends may sound like a good idea, the fees add up. Instead, offer to pay for outings with your credit card and ask your friends to pay you back instead. 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.