Cash App offers safe money transfers

Many of us want to make our financial lives as simple as possible. We write one check to the landlord and wait for our roommates to pay us for their share of the rent. We offer to pick up the tab at a restaurant instead of asking the server to split it seven ways. We give a friend a few bucks when they need it and tell them they can pay us back someday.

But letting people borrow money—even for something as small as the cost of a restaurant meal—can be an expensive proposition. According to a recent Bankrate survey, 60 percent of American adults have lent cash to a friend or family member with the expectation of being paid back; 37 percent of those adults never saw the money again.

That’s where peer-to-peer transfer apps like Cash App come in. Not only does Cash App make it easy to send money to friends and family, but it also makes it easy to request payments from people. We’re not saying sending someone a Cash App request will ensure you get the money you’re owed, but the Cash App notification could serve as a helpful reminder.

Plus, Cash App allows you to direct deposit your paycheck into your Cash App account, invest the funds in your account balance and use the Cash Card to make purchases everywhere Visa is accepted. Cash App isn’t just a money transfer service anymore; it’s a full-fledged financial tool.

How does Cash App work? What are the Cash App fees? Should you request a Cash App card? Let’s take a look at how to transfer money safely with Cash App—and how you can use Cash App to pay back friends and family, get reimbursed for group expenses and earn rewards on your purchases.

What is Cash App?

Cash App is a peer-to-peer money transfer service. Like Venmo, Cash App lets you quickly send and receive money. You can use Cash App to pay your share of the rent, reimburse friends and family members, make donations and even tip your hairstylist. You can also use Cash App to request money from friends and family. If you cover a friend’s meal at a group brunch, for example, you could send your friend a payment request through Cash App to make sure they pay their share of the bill.

Recently, Cash App has expanded to include additional features—like the ability to invest your Cash App account balance and the option to receive direct deposits in your Cash App account. Cash app even lets you convert dollars into Bitcoin, which you can do with a few simple taps from your home screen.

There’s also a new Cash App card that functions like a debit card, works wherever Visa is accepted and lets you make payments from your Cash App balance.

How does Cash App work?

Cash App has a simple interface that makes it easy to send or receive money. Tap the dollar amount you’d like to send or receive, tap “Request” or “Pay,” and you’ll be seconds away from sending a friend money or requesting that they send you money.

The money you send and receive through Cash App can come from a linked debit card, credit card or bank account—but you can also add money to your Cash App account and draw from that balance when you send funds. You can even get your paycheck direct-deposited into your Cash App account if you want to maximize your Cash App balance.

Once your Cash App account is set up, you can request a Cash Card if you prefer. This Cash App card is a free debit card that works wherever Visa is accepted. Any purchases you put on your Cash Card get withdrawn from your Cash App balance (or if you do not have enough money in your balance, your linked bank account)—and Cash App’s Boost program allows you to earn rewards on everyday purchases, including $1 off coffee shop visits.

Just keep in mind that Cash App’s Boost program is not on par with cash back programs from traditional rewards credit cards. Where this program lets you earn cash back on very specific purchases and only when you activate each offer manually, a cash back credit card would actually let you earn rewards on everything you buy.

Does Cash App charge any fees?

While using Cash App and its related Cash Card is totally free, there are a few fees you will face as you start using the app. Fortunately, these fees are avoidable.

Cash App charges a 3 percent fee if you use a credit card to send money, but making payments with a debit card or bank account is free.

Cash App also charges a 1.5 percent fee if you request an Instant Transfer of funds from your Cash App account to your linked debit card. If you request to transfer money to a bank account, the transfer is free — however, you must wait 1-3 business days for the transaction to process.

How to use Cash App to send money to friends

Make a Cash App account

First, download Cash App through the App Store or Google Play. Then, open the app and create an account by entering your phone number or email address and adding the one-time login code Cash App provides. You must be at least 18 to open a Cash App account.

Link your debit card, credit card or bank account

When you open a new Cash App account, you’ll be asked to add a bank account using your debit card. Enter your debit card number to complete the process, or skip this step. After your account is created, you can add additional banks and credit cards by tapping the bank icon on the app home screen.

If you link an active debit card to your Cash App account, you’ll be able to claim a $Cashtag. This is a short nickname that you can give to friends and family, to make it easier for them to find you on the app. People will also be able to send you money by entering your email address or phone number if they don’t know or can’t remember your $Cashtag.

Begin the payment process

Enter the amount of money you’d like to transfer. Then tap “Pay” and Cash App will ask you to identify the person who should receive the money.

Find the person you want to send money to

Enter the email address, phone number or $Cashtag of the person you want to send money to. Your recipient isn’t required to have a Cash App account; as long as you have their email address or phone number, you can use Cash App to transfer money to them. It’s important to note that if your recipient doesn’t accept the money within 14 days, the transfer will expire.

Complete the transfer

Enter a short note on what the payment is for—maybe you’re paying someone back for movie tickets, for example—and tap “Pay” again to complete the transfer.

Does Cash App take credit cards?

Cash App does allow you to link credit cards to your account and use those cards to make purchases or transfer money. When you use a credit card with Cash App, you’ll pay a 3 percent fee on the transaction. If you want to avoid paying this fee, use a debit card or a linked bank account with Cash App—because debit and bank account transactions are fee-free.

When you use a credit card to send money to friends on Cash App, you should be aware your card issuer might categorize the transaction as a cash advance. Some lenders count peer-to-peer transactions as cash advances because they consider it the equivalent of handing your friend cash—and cash advances come with higher-than-usual interest rates that begin compounding the day the transaction is made, with no grace period to allow you to pay off the debt interest-free. To minimize the cost of a cash advance, pay off your credit card balance as quickly as possible.

Still, you will definitely want to find out for sure if your card issuer codes Cash app transfers made with a credit card as a cash advance. Discover does not, for example, and the same could be true with other major card issuers, although it may be difficult to get confirmation from customer service representatives.

If you want to know for sure whether your credit card will charge a Cash app transfer as a cash advance, an easy way to check is to transfer a small amount of money first then check your credit card statement to look for additional cash advance charges. If they never appear, that’s a good sign you can use your credit card to transfer money and earn rewards without having to pay pesky cash advance fees that can wipe out any benefit.

Best way to earn credit card rewards with Cash App?

If your credit card issuer doesn’t charge a cash advance fee, Cash App could also be a helpful tool when it comes to meeting a minimum spending requirement to earn a sign-up bonus.

Let’s say you signed up for the Chase Sapphire Preferred® in order to earn the bonus of 60,000 points when you spend $4,000 within three months of account opening. If you were $1,000 short of the spending requirement to earn this bonus, you could use Cash App to send money to a trusted friend or a partner with your credit card with a 3 percent fee. (Of course, you would want this money back!)

This means you would pay $30 to send your friend $1,000 through Cash App, but the move could inch you over the finish line in earning 60,000 Chase Ultimate Rewards points, which are worth $600, or $750 when redeemed for travel through the Chase portal when processing this transaction in the first 3 months of account opening.

That’s just one example, and there are many other top credit card offers with bonuses worth hundreds of dollars. If you’re angling for a new credit card sign-up bonus and you’re realizing Cash App could help, make sure to check out the top rewards credit cards to see how they stack up.

Of course, you don’t have to have a credit card to earn rewards with Cash App. If you have the Cash Card, you can use Cash App’s Boost program to get instant discounts on purchases. That’s another great way to earn rewards with Cash App!

Frequently Asked Questions about Cash App

Are Cash App transactions safe and private?

All Cash App payment information is encrypted, and users receive a one-time-use login code every time they sign into the app. Any transactions you make are private and do not appear on a public social feed like Venmo transactions.

Is the money on my Cash App account insured?

The money on your Cash App account is not FDIC-insured. However, money held in your Cash App account is FDIC insured if you use the Cash App card.

How quickly do Cash App transactions go through?

Cash App transactions are instant.

Can I cancel a Cash App transaction?

Since Cash App transactions are instant, you won’t be able to cancel a transaction after you’ve made it.

If you make an accidental payment or transfer money to the wrong person, you can use Cash App’s request function to request that they pay you back—but there’s no guarantee that you’ll see your cash again. That’s why it’s important to always double-check your $Cashtags, phone numbers and dollar amounts before sending money through Cash App, Venmo or any other peer-to-peer payment service.

Does Cash App let you earn credit card rewards?

You can earn rewards on Cash App transfers you make with a linked credit card, but a 3 percent credit card transaction fee will apply.