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Venmo to charge 3% fee for credit card transactions

Venmo to charge 3% fee for credit card transactions

Million Mile SecretsVenmo to charge 3% fee for credit card transactionsMillion Mile Secrets Team

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Venmo along with Amazon Payments was one of the best tools in the 40+ Powerful Ways To Complete Your Credit Card Minimum Spending Requirements.  That’s because you could transfer up to $2,000 to another person for free with a credit card.  This made it pretty easy to complete minimum spending requirements for new credit cards.

Of course, Venmo was likely eating the ~3% charge on each credit card transaction and was willing to do so to grow and gain new users.

Well, Vemo announced that it will charge a 3% fee to new users who want to use a credit card to send money to another person.

Existing users will also have to pay the 3% fee, starting from May 1, 2012, once they cross their lifetime free credit card allowance of $500.

Paying 3% to earn miles and points doesn’t make sense in most cases, but it does make sense if you have no other way to meet the minimum spending on a credit card.  For example, I’d gladly pay $90 ( 3% of $3,000) to complete the $3,000 minimum spending requirements on a credit card if that was the only way I’d earn the 50,000 mile sign on bonus.

This isn’t good news, but it isn’t unexpected either.  Venmo, which lacks the deep pockets of Amazon, couldn’t bear the 3% cost indefinitely.  If something is too good to be true, it likely won’t last forever!

Bottom Line:  If you already have a Venmo account, you have only 2 months (March and April) to make fee-free transfers using a credit card before the 3% fee goes into effect.

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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Question about amazon payments and venmo. They both say limit of 200k/200 transaction before they will report 1099-k to the IRS. Are they individually or they they combine transactions from both amazon and venmo??

Author
Million Mile Secrets

@Doemow– I believe it is an individual limit.

@dazed It sounds like an ok deal to me (a novice with this idea). Could you let me know if you actually used it? If so, could you answer my question from my previous post, please?

Thanks in advance for your kind attention & response

It’s actually 250 per month for the serve.com limit, and serve is also being to charge fees starting in July 2012

@PY, @MMS and @others,

Hello,

Have you tried using Serve.Com for transferring money from a Credit Card?

Please let me know.

My Question is: If I get money from one of my CC into Serve.Com – will that be treated as a cash withdrawal by my CC? Or will it be recorded as a purchase on my CC?

Thanks in advance for your attention and responses.

Author
Million Mile Secrets

@Srini – The funding limit for a credit card is too low to even bother. The last time I checked there was a $200 limit on credit card funding.

Thanks Christian!

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