How to send money abroad using a credit card

How to send money abroad using a credit card

You’ve probably sent money abroad recently to take care of your loved ones or to complete an important project back home.

With technology now so advanced, the most popular methods for money transfers are bank wire transfers, PayPal, Western Union, MoneyGram and of course good old cash directly through friends and relatives.

Sending money abroad using a credit card is another option, though you may not have thought of it in the past.

However, life happens, and this method could come in handy, especially in an emergency.

There are many factors you should put into consideration before sending money abroad. You must think about the safety, speed, the fees and any hidden cost.

In this article, we’ll give you a full breakdown of everything you need to know, so when next you are using your credit card for money transfers, there are no questions.

How can I send money abroad using my credit card?

There are several ways to send money to that relative or friend abroad with your credit card. Here are all the four options:

1. Through your local bank

How it works: Transfer funds from your credit card account into your checking account using your App or online banking

Do the international wire transfer at the bank or through your online banking. The money would be taken out of your checking account, but it originated from your credit card account.

Some banks may let you do the international money transfer directly using your credit card without having to first move it into your checking

Pros

  • Safe, convenient, and secure.
  • Depending on your card type, you can earn some reward points
  • Absolutely helpful when you are cash strapped or in an emergency and have no funds in your bank accounts.

Cons:

The funds debited from a credit card are treated as a "Cash Advance" and the interest rate is charged from the day you send the money.

  • The interest rates are high and sometimes could be up to 25%
  • High exchange rate margins so you lose some money.
  • The amount allowed to be transferred by this method is often limited.
  • Not accepted everywhere.

Fees

  • A flat percentage fee is charged, and it varies from bank to bank.
  • A small commission is also applied based on the amount being sent

Hidden costs

The exchange rate is outside your control additional commissions and charges may apply. This is usually in small print.

2. Through Western Union

You can also send money abroad using a credit card through Western Union.

Here’s how:

1.Log in or sign up and verify your free account. Click 'Send now' to start your transfer. 2.Enter the destination and choose the amount you'd like to send. 3.Select 'Bank account or payment option 4.Pay with your credit/debit card 5. Review and confirm, and your money is on the way.

Alternatively, you can walk into the nearest Western Union local office and do

Pros

  • Quick, easy, and convenient
  • Money can be received by your loved ones in a few hours in over 200,000.
  • You can earn reward points on The Western Union rewards program
  • It meets your need in an emergency

Cons

  • Western Union has unfavourable exchange rate.
  • Limit on transfers
  • Money transfers using a credit card are also treated as a "Cash Advance" and the exorbitant interest rate is charged from the day you send the money.

Fees

Western Union money charges a flat fee of $10. Additional charges may apply to certain destinations

Hidden charges

Additional third-party charges often apply. SMS and account over-limit and cash-out fees may also be charged

3. Money transfer specialists

Other specialist money transfer companies like WorldRemit, Ria Money Transfers, Wise and some others will allow you to send money with your credit card.

The steps and requirements are like those of Western Union. The rates and conditions might vary slightly based on the respective service provider. Shop around to compare rates.

4. PayPal

How it works

1.Set up or sign in to your PayPal account 2. Follow the prompts 3. Link your credit card to your 4. Authorize and verify the money

Pros

  • Sound reputation.
  • User friendly.
  • An added layer of security and fraud protection.

Cons

  • Money transfer is sometimes delayed
  • High fees and poor exchange rates.
  • Recipient paid in local currency

Fees and Exchange Rate

PayPal chares 2.59% + $0.49 on every online transaction

How about MoneyGram?

You might be wondering if MoneyGram can be used to send money abroad by credit card. Surprisingly, it doesn’t. In Canada, you can only use a debit card

What else do you need to know on how to send money abroad?

If you want convenience and don't have enough cash in your account, sending money abroad using your credit card is a great option.

If you are transferring money from Canada, a better option besides those stated above is Remitbee. It was founded by Canadian immigrants for Canadians.

It offers competitive exchange rates and minimal fees, knowing that every dollar is important.

Sign up here