Free Credit Card Spend (And Miles) From Venmo Changing May 1

by on March 19, 2012 · 16 comments

in Credit Cards

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Electronic payment services can be one of the best ways to help you meet minimum spend requirements on a new credit card, and in the past I have talked about Venmo and Amazon Payments.

Well, news just came that starting May 1, 2012, users of Venmo will only be able to charge up to a total of $500 to their credit card over the life of the account without a fee, but above that there will be a 3% fee for funds sent via credit cards–effectively ending Venmo’s potential as a points-earning payment method. Bank payments (which don’t earn you any miles/points) will remain free. If you were not already signed up for Venmo, you will only have the option to make bank payments for free starting now, so no last-minute fee-free points-earning opportunities for you, unfortunately, though you can try to use my referral link to set up your account with a credit card and take advantage of the last month or so of credit card payments. I’m not sure it will work, but can’t hurt to try!

Even though 3% may not seem like a lot, it can still pretty much negate the value of any points you earn using your credit card. Until May 1, however, at least you can charge up to $2,000 a month through the service to earn a few last-minute points.

Those of you who were at the Chicago Seminars last year might remember that I talked about Venmo, where I said that Venmo is one of the sites leading the general trend toward cashless banking. While that still might be true, I hope that they’re not at the forefront of a fee-levying trend that sees all points-earning opportunities dry up!

You can find a complete description of the new fee on Venmo’s web site. As with all good deals, they come to an end!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Hank

    Hate to say it but the $500 fee free limit is a lifetime limit, not a monthly allowance. Once you hit $500 (including spend before May 1) you will be charged fees.

  • Bwest

    I was at $200.00 monthly after I transferred a few pmts to my bro and my moms. Venmo locked me down quickly. And I concur w Hank I dont see where it says “monthly” jsut $500 limit.

  • Wesley Choate

    I have sent an email asking for a clear clarification on monthly/annual/lifetime for the $500 fee as they leave it open a little to interpretation on their site IMHO.

  • Jruiz2159

    Just to be clear…are you saying that Amazon Payments also will have a 3% fee for using credit cards? You were allowed to do $1000 in transactions per month fee free, so as of May 1st…that ends?

  • Joediver

    Square made the same announcement for their services. I believe they are going to charge 2.75%

  • thepointsguy

    No- this is just related to Venmo

  • Hseplow1

    From Venmo’s email to users, which makes it seem that ANY credit card payments will be charged a 3% fee (not just those above $500/month):

    So, what’s changing?

    Until May 1st,

    You can continue using Venmo the way you do now.
    You can opt to switch to bank payments at any time by following a few simple steps. Click here to switch now.
    Starting May 1st for you (and starting today for new users),

    To continue using Venmo for free, you must switch to bank payments.
    If you still want to use your credit card, you can set it as your funding source, but you will be charged 3% to cover credit card processing fees.

  • Jruiz2159

    Thank you so much

  • Mike

    Square has always charged that fee.

  • Gabriel

    You won’t get $6k free per year. It’s $500 ONE TIME…but that can be spread out over the lifetime of the account. Venmo is effectively dead as a free credit card option.

  • The Points Guy

    We updated the post to reflect the clarification, thanks!

  • Dan

    Still Venmo seems an effective way to help meet a high minimum spend requirement for a new credit card.

  • Wla

    Darn, I literally just signed up this month! Oh well, 4,000 pts isn’t too shabby I suppose.

  • David – Travel and Credit

    I broke the news on this yesterday, after staring at my laptop with a frown. :(
    Glad to have cleared over 50,000 last year through Venmo, but oh it’s so sad to see them go.

  • Dax

    It’s so sad and shocking that they will no longer be paying the credit card transaction fee for free, right?

  • Joshcom

    For new accounts, the $500 lifetime limit on free credit card funding starts immediately, not May 1. I just signed up and got the bad news. Sigh. And they specify that it doesn’t matter how many credit cards you add, either.

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