Venmo Card Review: Should You Sign Up?

Venmo Card Review: Should You Sign Up?

The Venmo card has added an innovative feel to the way that people use credit cards to make purchases.

Venmo combines smartphone technology with social media to make money transfers in the U.S. easier.

Since it’s launch back in 2008, the payment app has seen steady growth. According to the Q1 financial report released by Paypal, 40 million people were using Venmo.

The same report shared that the platform had handled $21 billion in transfers alone. In doing so, the company had grown by 73%.

Thanks to its increasing popularity, others are wondering whether they should get on board with Venmo.

Here, we will go over everything that you need to know about the Venmo credit card and whether it’s worth the hassle. Let’s get right into it.

What is Venmo Card

A Venmo card is a branded card issued by Venmo. With it, the cardholder can access funds in their Venmo account and use them to make purchases.

The card operates like a Mastercard.

Therefore, you can use it to pay for goods and services in stores that accept Mastercards in the U.S.

Andrew Kortina and Iqram Magdon-Ismail are the founders of the company. They started it back when they were in college as a way to facilitate easier repayments between college friends.

Initially, Venmo started off as a basic SMS platform that enabled their small circle of colleagues to send and receive mobile payments to each other. Since then, millions of users have gotten on board with the program and are using it in innovative ways. One of its biggest competitors is Apple Pay.

How Does the Venmo Card Work

In order to make a Venmo transaction, you must have a balance on your Venmo account. The platform allows you to link your account with your U.S. banking information. This allows it to communicate with your bank either to:

  1. Transfer money from your Venmo account to your bank account
  2. Access the available funds on your bank account to use on purchases in case you do not have sufficient funds on your Venmo account

Once you have set up an account, you can check your balance via the Venmo login portal. The company employs a similar account linkage system to Paypal. This is because Paypal is Venmo’s parent company.

Bearing this in mind, the Venmo card allows you to make purchases on goods and services in stores that accept Mastercards. To do this, Venmo accesses both the balance on your platform as well as the available funds in your linked bank account. Remember, you cannot use your Venmo card to make purchases from international merchants.

If at the time of using the debit card your Venmo balance is sufficient enough to cover your Venmo card purchases, it will be deducted.

The only time Venmo will tap into the funds in your bank account is if the amount you are charged exceeds the balance in your account.

Let’s take a closer look at how this specific feature works with a Venmo credit card.

Account Balance

Venmo has an optional feature known as “Venmo Card Reloads.” This feature allows you to use funds that are in your bank account to cover purchases that exceed your Venmo balance. It transfers those funds in sums of $10.

However, this feature is optional in the sense that the account holder is the one who chooses if they want it activated or not.

What’s more, you can also set up your account in such a way that automated transfers are done from your bank account to your Venmo balance. These transfers can come at $0 cost to the user.

However, please bear in mind that they take anywhere from three to five business days to process.

Venmo does have an instant-transfer service which credits your card within 30 minutes of doing a transfer.

That said, the company does charge a 1% fee.

Is the Venmo Card Free?

Applying for a Venmo card is completely free — there are no application or annual fees associated with it. To apply for the card, you just need to download the Venmo app from Google Play or App Store, login, go to settings, and click on “Venmo Card”.

Also, there are no fees when you use your Venmo card for purchases. There may, however, be foreign transaction fees associated with your card. You will also need to pay fees when using an ATM. Let’s look into that with more details:

Venmo Card’s Additional Features & ATM Withdraws

In addition to facilitating online money payments and transfers, the Venmo credit card allows you to convert your balance into cash.

Because it operates like a Mastercard, it can be used at any ATM machine that accepts Mastercard®, Cirrus®, or Pulse® cards.

If you withdraw funds with this card at a MoneyPass ATM, you do not incur any ATM fees.

At all other ATMs, you will be charged a fee of $2.50 per withdrawal.

Image retrieved from CreditKarma.com

At the time of writing this article, there were over 32,000 MoneyPass ATMs in the United States. That way, Venmo users have ample opportunities to cash out their Venmo balance. There is, however, a daily limit of $400 for cash withdrawals from these ATMs.

That said, even though your Venmo card is linked to your bank account, you cannot make withdrawals from your bank account balance with this card.

Additionally, each time you make a purchase with your card, you get a notification via the platform’s mobile app.

Moreover, with the app, you can send payments to other registered users. In order to do this, you will need to have added those users to your account.

This can prove to be useful in cases where you need to make payments to friends or family members for loans.

Venmo Card Benefits and Perks

Venmo offers cash rewards to its shoppers for the purchases that they make.

Having said that, a user does not get rewards on every card transaction that they perform.

Venmo has a list of merchants from which you get rewards on card transactions.

This list is available for viewing in the card section of the app. These merchants include:

  • Wendys
  • Target
  • Chevron
  • Papa John’s
  • Sam’s Club
  • Sephora
  • Dunkin’ Donuts

The company has partnered with Dosh, an app that handles cash reward programs.

Every time you use your Venmo credit card, the system sends a message to Dosh. The app then checks to see if you are eligible for cashback rewards. These rewards are calculated based on a percentage system.

In other words, depending on the merchant, you will receive anywhere from a 2 – 5% return on money spent.

Once the charge has been registered and cleared on the merchant’s end, your Venmo account will be credited accordingly.

How to Sign up for a Venmo Card

The signup process is quite simple. You have to download the iOS or Android mobile app for Venmo. Choose a signup method and add your details such as a password. The next step is your phone number and email verification. After that, you have to add your bank account and then verify it.

Once your account is created you can receive funds, make withdrawals (with a small withdrawal fee) and carry out other activities. To allow certain transfers or activities, Venmo may ask for your personal information, such as Social Security Number verification as well.

Who Uses A Venmo Credit Card

While a Venmo card appeals to a wide spectrum of people, there is a specific profile to which these cards appeal: people who have loans.

Because they are focused on repaying their financial deficit, borrowers often find themselves in situations where they are unable to make certain payments.

With a Venmo card, users can control their expenses and utilize the app to issue payments to their friends and family should the need arise.

To better explain, let’s take a closer look at how student loan borrowers can benefit from these features.

Apply For A Venmo Credit Card

In short, a Venmo credit card is a useful tool for someone who often makes and receives payments.

The system provides a safe way to handle your money while you get the chance to earn reward points.

The key is to be strategic in how you use the card so that you can maximize the benefits that they bring to you.