Who uses credit cards for cash?

[dirtbiker]

I have recently decided to transition all of my automatic bill payments, monthly spending, etc. to my credit card and then pay the balance off each month. Excluding my mortgage (which won't let me pay with a card), this will come out to about $80,000 per year, which will net me about $1000 cash back, or more if I use it for travel.

My mortgage costs me $26400 per year, which would add an extra $300 cash back to my yearly CC total. Since I can't pay with a card, I could withdrawal cash from my CC and then deposit that into my bank to pay the mortgage, and then just pay off the entire balance each month... And with this in mind, why not max out my cash allowance every month, put it into my bank, and use this to pay the balance, and really rack up CC points for travel?

Anyone else do this? Any issues? I'm assuming this is perfectly legal? I can't see why not.

 

[COcheesehead]

You will be charged a fee for the cash advance.

 

[COcheesehead]

Also if you get a 2% card, the $80,000 will get you $1600.

 

[upupandaway]

Yes the fee I assume would kill any advantage unless there is a card I don't know of that does fee free cash advances. Here are the terms of the Chase Southwest Card.

Cash Advance Fee
Either $10 or 5% of the amount of each transaction, whichever is greater.

 

[lemming]

All my "bills" ie utilities and lawncare charge a fee for using a credit card to pay. Even the food bank asks me to add on the cc fee to my donation so they don't have to pay it.

 

[Aerides]

I dont think points are awarded on cash like purchases are, and yup the initial fees will make it a bad idea almost always.

also, with many cards there may be zero-days of grace period on cash advances.

 

[Sojourner]

When you say "withdraw cash from my CC", are you referring to getting a cash advance? If I'm not mistaken, you will pay a fairly hefty fee for doing that, something in the neighborhood of 5%. So if, for example, you withdraw $1,000 from your CC to pay your monthly mortgage, you'll pay $50 for that privilege, which I suspect would pretty much torpedo your overall plan.

Another thing to keep in mind is that other sizable payments (e.g., property taxes, certain local utilities, etc.) cannot be paid by CC without a fee. And those fees typically are more than the 1.5-2.0% that your CC is giving you back in the form of miles or cash back bonus.

 

[dirtbiker]

Awe crap! I figured it was too good to be true. I didn't realize there were fees. I've never used cash advances on CC before. I thought it was just like swiping for a purchase. Well, scrap that idea!

There is only one bill of mine that charges extra for a credit card, and for that one I'll continue having it taken from my bank account.

And, COcheesehead, we're currently looking at different bonus point cards to find one with the best points. Right now we've got Chase Sapphire, which is okay, but there are better ones out there. Oh, and I only want Visa or Mastercard. I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

 

[calmloki]

We like the simplicity of our Fidelity cards. 2% across the board, deposited into a Fidelity account we set up just to receive the rebates. They rebate in $50 increments and after it builds up we ACH to other bank accounts.. No annual fee.

Some ER member suggested using one card ONLY for auto bill pay transactions. We do that now - thinking is that if you get hacked out in the wild or lose a card you don't have to re-set up all your auto-payments. We have two Fidelity card accounts, one for auto-pays and one for the wallets.

The big bucks come from the card bonus payments - I'm hunting a new card now, as we have close to $5000 in various insurance and utility bills coming up in the next couple months.

 

[COcheesehead]

Awe crap! I figured it was too good to be true. I didn't realize there were fees. I've never used cash advances on CC before. I thought it was just like swiping for a purchase. Well, scrap that idea!

There is only one bill of mine that charges extra for a credit card, and for that one I'll continue having it taken from my bank account.

And, COcheesehead, we're currently looking at different bonus point cards to find one with the best points. Right now we've got Chase Sapphire, which is okay, but there are better ones out there. Oh, and I only want Visa or Mastercard. I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

I have a Fidelity Visa that pays me 2%. My wife has a Capital One Mastercard that pays 2% as well.

 

[gwraigty]

Oh, and I only want Visa or Mastercard. I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

Fidelity Visa - 2% automatically deposited into an eligible Fidelity account
Citi Mastercard - 2% as long as you don't redeem for a statement credit
PayPal Mastercard - 2% can be redeemed into your PayPal account

Those are the straight 2% cashback card I know about. I have the Fidelity Visa.

 

[Aerides]

From the T&C from amex blue (likely similar terms on every other major CC):

We begin charging interest on cash advances from the transaction date
Transaction fee of $10 or 5% of the cash advance, whichever is greater, treated as part of the Cash Advance balance (and therefore the interest)

Basically, cash from a CC is an emergency move.

 

[Nemo2]

I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

Had the same experience(s)......in Kenya, circa 1985, an Indian owned store asked if we had 'another card', since AMX were apparently known as 'slow payers'.

In Belize, early 1990s, one place charged a premium for AMX payers, (we weren't among them).

Shortly thereafter we unloaded the card, but not before receiving numerous 'pleading letters'.

 

[Finance Dave]

Awe crap! I figured it was too good to be true. I didn't realize there were fees. I've never used cash advances on CC before. I thought it was just like swiping for a purchase. Well, scrap that idea!

There is only one bill of mine that charges extra for a credit card, and for that one I'll continue having it taken from my bank account.

And, COcheesehead, we're currently looking at different bonus point cards to find one with the best points. Right now we've got Chase Sapphire, which is okay, but there are better ones out there. Oh, and I only want Visa or Mastercard. I'm not interested in American Express. I had one in the past, and it seemed there were too many places that don't take it.

Good luck. I would never deal with one of the large banks even if they have better "points" schemes. Too many hidden fees and difficult to work with IMO. I was the Treasurer for a non-profit and we had SunTrust bank...they were HORRIBLE to work with on any administrative items. I use local credit union for all my banking...easier to deal with although sometimes they don't have the wide variety of "products" that some people need...doesn't bother me.

 

[Drake3287]

Many of us play this cash rewards game. I literally charge EVERYTHING and get back around $2,000. each year through the BofA Travel Reward Visa card. Haven't paid a cent in finance charges in 20 years.

In the "Old" days of airline credit card points I was lucky enough to get maybe one free ticket a year which I had to fight for. Now I get 4 tickets for the same amount of charging plus I earn rewards on the $2,000. I spend.

 

[COcheesehead]

Many of us play this cash rewards game. I literally charge EVERYTHING and get back around $2,000. each year through the BofA Travel Reward Visa card. Haven't paid a cent in finance charges in 20 years.

In the "Old" days of airline credit card points I was lucky enough to get maybe one free ticket a year which I had to fight for. Now I get 4 tickets for the same amount of charging plus I earn rewards on the $2,000. I spend.

Yep, right there with you. I put all my business expenses, cable, anything that doesn't charge me a fee. Last year we made over $2400 in cash back. We are at $1966 YTD. I have 25,000 air miles at United that I can't even use. Give me the cash.
As to the hidden fees comment above. Never happened to me in many, many years of using a "big bank."

 

[COcheesehead]

One other tidbit, ask for credit line increases when you still can show income. I ask for $5000 a year and get it.

 

[JPatrick]

Many of us play this cash rewards game. I literally charge EVERYTHING and get back around $2,000. each year through the BofA Travel Reward Visa card. Haven't paid a cent in finance charges in 20 years.

In the "Old" days of airline credit card points I was lucky enough to get maybe one free ticket a year which I had to fight for. Now I get 4 tickets for the same amount of charging plus I earn rewards on the $2,000. I spend.

Yup, same deal here. Pretty much every dime we spend starts its' life on the 2% FIDO Visa. When we receive our pension/SS payments we immediately deposit the estimated amount of the forthcoming CC bill into a FIDO MM fund where it sits and earns until the CC is due...
Then a couple of clicks and the bill is paid and we start over.

 

[jazz4cash]

All my "bills" ie utilities and lawncare charge a fee for using a credit card to pay. Even the food bank asks me to add on the cc fee to my donation so they don't have to pay it.

This thread is very similar to another one from a few weeks ago.
Some utilities charge a flat fee that is about 0.5% so I pay the fee. If the utility charge is tiny, I might pay 2 months at once. The property tax fee is 2% so that won’t work and neither will the mortgage. My big category is home, auto, and life insurance.

 

[Senator]

When you take a cash advance, in addition to any cash advance fees, you start paying 18%+ right away. There is no grace period.

I use my CC for everything I can, including IRA taxes. Pay 1.87% on $4K, and I get back 2% on both the $4K and the $74.80 in charges. So it's slightly less than a 1.87% charge.

US Bank Cash plus has a home utilities at a 5% rebate. I charge all my rental water bills on it for no-fee.

I get ~$5K in rebates each year.

 

[rk911]

I have recently decided to transition all of my automatic bill payments, monthly spending, etc. to my credit card and then pay the balance off each month. Excluding my mortgage (which won't let me pay with a card), this will come out to about $80,000 per year, which will net me about $1000 cash back, or more if I use it for travel.

My mortgage costs me $26400 per year, which would add an extra $300 cash back to my yearly CC total. Since I can't pay with a card, I could withdrawal cash from my CC and then deposit that into my bank to pay the mortgage, and then just pay off the entire balance each month... And with this in mind, why not max out my cash allowance every month, put it into my bank, and use this to pay the balance, and really rack up CC points for travel?

Anyone else do this? Any issues? I'm assuming this is perfectly legal? I can't see why not.

the only cash we pull is an extra $50-$100 over the total when purchasing groceries, usually during an RV trip. we pay in full each month so no interest charges whatsoever.

 

[Cobra9777]

The only expenses we don't pay with cash-back CCs are: federal tax, property tax, and health insurance premiums. We both have retiree health insurance with our former employers and both require automatic bank draft for premium payments... no CC option. There are CC options for property tax and federal tax, but the fees are too much.

Everything else goes on one of 3 cash-back CCs:

1. AMEX Blue Cash: 5% on groceries, gasoline, and drug stores
2. Amazon/Chase VISA: 5% on all Amazon purchases
3. Fidelity/Elan VISA: 2% on everything else

We pay no annual fees and no one charges extra fees for CC use.

Based on current spending patterns, we average 2.6% on about $80K of CC spend, so a little over $2K per year in cash back. We've been shifting more household goods to Amazon for the 5%. Plus I've been using their subscribe-and-save program for additional discounts, typically 15-20%.

I've also been known to play the Kroger gift card & fuel points game, but usually only around the holidays when they offer 4X fuel points on gift card purchases. That's about as creative as I get on so-called "manufacturing spend."

 

[CaptTom]

Fidelity Visa - 2% automatically deposited into an eligible Fidelity account
Citi Mastercard - 2% as long as you don't redeem for a statement credit
PayPal Mastercard - 2% can be redeemed into your PayPal account

Those are the straight 2% cashback card I know about. I have the Fidelity Visa.

Citibank DoubleCash gives 2% back, and I always select statement credit. That's my primary card for day-to-day purchases.

I have a 1% card that I use for automatic payments. The Fidelity card looks like a promising update.

I still have a PenFed card that's grandfathered in at 5% for gas. That one stays in the vehicles. As long as gas stays above $2 per gallon, that's better than the 10 cents off loyalty cards the gas stations are all offering. Those withdraw directly from a checking account, so the station doesn't have to pay the card fees. I'd probably switch to one or more of those if (when) the 5% deal goes away.

 

[kaneohe]

Citibank DoubleCash gives 2% back, and I always select statement credit. ...................................................

Originally Posted by gwraigty View Post
..
Citi Mastercard - 2% as long as you don't redeem for a statement credit
************************************************************

If you select statement credit ,then aren't you earning only 1% back?
(losing half of your potential rewards)

 

[jazz4cash]

Another hack I’ve started using is to alternate bretween 2 Cashback cards every 2 weeks. That gets me an extra 14 days of float for a total of 42 days. That money stays invested in a high yield account and set to autopay on the due date.