Tuesday, June 18, 2024

Cash advance suicide
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.

Scott Bilker


Fantastic info, not for scatterbrains though. I have three cards currently all intro 0% wondering if I made a cash advance of say $1,000.00 then immediately took advantage of 0% balance transfer, would I still be liable for the 24.99% advance rate as well as the fee even though account was paid off the same day or at least within billing cycle? Trying to avoid cash advance suicide, also are there any fund transfer services that make the bank think it's a purchase? 



Thanks for writing--glad to hear that you like what you find here at DebtSmart.com!

I am assuming that you mean that the 0% intro rate is on purchases, so the short answer is yes! You are going to be responsible for the higher rate and fees if you do as you're thinking. That's because interest is charged from the moment you take a cash advance. There are no grace periods for cash advances (usually).

The reason why the intro rate is on purchases is because the bank is still making money by charging merchants for each transaction. With this offer, they still get paid for your purchases and that would not be the case for transfers or cash advances.

There is no transfer fund service, that I know of, that would make a cash advance appear as a purchase. What you're trying to do is convert a purchase rate into a cash advance rate.

Hmmm...thinking creatively I can see one method that would, in theory, work. However, I WOULD NOT recommend it, endorse it, or do it; but I would talk about it. Say you bought something that can be easily sold, like a video game or an expensive watch, with your 0% purchase deal. Then you sold that item on eBay or by some other means so you would get the money. In a sense, you have then gotten cash with your purchase rate. However, there is a cost because it will take your time to do this. You will have to pay fees to do the sale. And, you may not get the full price for the merchandise when you sell it. It's still interesting to think about and again. I DON'T RECOMMEND DOING THAT!

The best thing to do is use your credit card to purchase stuff you would normally buy with cash (groceries, gas, etc). Then these things would be at 0%. The cash that you would have used to buy those items could then be used to pay off other debt at a high rate. In effect, giving you your own cash at 0% with a grace period. How does that sound?


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