For Goodness Sake, Do Not Use Your Credit Card With Venmo

Welcome to Saving Money with Andrew!

I don’t like Venmo—I think it’s way too easy to send funds to the wrong person, and you may have limited recourse if someone hacks your account. But unfortunately it’s essential, so I use it grudgingly. But I try not to link our bank accounts to anything, so we’ve historically used it with a credit card.

Three years ago, I told a cautionary tale in Caveat Venmo of Citi charging us extra fees for using Venmo. Ultimately, we switched to our Chase card (the Amazon Prime Chase Visa) which at the time didn’t charge any fees for Venmo use. And so we continued Venmo-ing away.

Fast forward to last week, when I reviewed my recent card statement. What I saw startled me. Over $50 in various cash advance fees and interest charges, with a cash advance balance racking up interest daily at an annualized rate of 29%.

As it turns out, Chase now charges a 4% fee (in addition to Venmo’s 3% fee for using a credit card), with a $5 minimum per transaction. Even worse, payments made on Venmo are treated as cash advances. This means that any money sent on Venmo immediately starts accruing interest at Chase’s cash advance rate (29% in our case), with no grace period until the end of the payment cycle like regular purchases.

Horrified, I immediately called Chase and very politely explained that I had no idea that they were charging fees on Venmo transactions and asked if there was anything they could do to help. A few minutes later, the helpful rep refunded all but $10 of the fees. But I can only imagine how many customers don’t check their statements and are charged tens or even hundreds of dollars of fees for their Venmo use.

Going forward, we are going to associate our Venmo with a low-balance bank account used primarily for payment services, which is what we should have done in the first place. If you use your credit card on Venmo, check your statement closely, and please don’t make the same mistake we made!

And now, Andrew’s pick(s) of the week:

Tipping at Self-Checkout Has Customers Crying ‘Emotional Blackmail’

High-Tech Banks Grapple With a Rise in Old-Fashioned Crime: Check Fraud. If you live in a major city, please don’t put checks in a mailbox (take the envelope to the nearest post office instead). Better yet, don’t use paper checks.

The Home Buyer’s Quandary: Nobody’s Selling

Workers Now Spend Two Full Days a Week on Email and in Meetings

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