Do You Earn Rewards on Venmo, PayPal, and Cash App?
This guide explains when these apps earn rewards, when they charge you instead, and how to use them wisely.
Paying merchants earns rewards
When you use a credit card to check out at a merchant that accepts Venmo, PayPal, or Cash App, the transaction is generally processed as a normal purchase, so you earn your usual rewards. Business profiles and online stores that take these apps fall into this category, and it works like tapping your card anywhere else.
Sending money to friends usually costs you
Peer-to-peer transfers are different. If you fund a payment to a friend with a credit card, these apps typically charge a fee of around three percent, and the transaction may be coded as a cash-like transfer that earns no rewards and, on some cards, could even count as a cash advance. Funding the same transfer from a linked bank account is usually free but of course earns nothing.
How to use them wisely
The simple rule: use a credit card through these apps for genuine merchant purchases to earn rewards, and use a linked bank account, not a card, for sending money to people to avoid the fee. Chasing rewards on peer transfers rarely pays off once the fee is counted, and it is the kind of pattern that can look like manufactured spend to an issuer.
- Paying a merchant through the app with a card usually earns rewards.
- Sending money to friends with a card usually costs about three percent.
- Peer transfers with a card can be treated like cash and earn nothing.
- Linking a bank account for transfers is free but earns nothing.
- Read each app’s fee before using a credit card.
Frequently asked questions
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