When a cash advance isn’t
This seems kinda stupid:
You can order thousands of dollars of $1 coins on your credit card at face value, and the mint will ship them to you overnight free of charge. They are treated as a purchase, not a cash advance, so not only do you not pay finance charges, but you earn airline miles or cashback rewards just like a regular purchase. You can then immediately take the coins to the bank and deposit them to start earning interest, and you don’t have to pay for them until the due date on your next credit card bill.
And, hey, if you’re about to default on your credit cards, why not order a ton of money and have it shipped to your door!
July 23rd, 2009 at 10:02 am
Well…my quick guess is that the credit card company thinks you’re buying something, because of the way the Mint charges it.
Thus, it’s not a “cash advance”, which is “debt charged to the card not specifically for a purchase”, and you get your item of value (dollar-coins).
My question is, can you order $20-dollar bills this way?
July 23rd, 2009 at 10:14 am
Obviously it’s cheaper to ship out the coins to the end user rather than continue to stockpile the dollar coins that Bureaucracy built.
Now they’re putting presidents on the coins? Haven’t they figured out yet that the form factor is a loser? Even if they plate that crap with “gold” it’s still a loser.
I like your idea about defaulting on the credit cards, but if that’s the case, why not get folding money and ignore the cash advance fee that you are not going to pay anyway?
July 23rd, 2009 at 10:19 am
I think cards have lower limits for cash advances.
July 23rd, 2009 at 10:24 am
Be careful with the default talk.
Buying things on a card withing 70 days (used to be 60 days) and then defaulting can be considered fraud and is prosecuted. At the very least, the card company will sue you in bankruptcy court for the full value plus interest and fees for the value of your charges.
The idea of buying coins instead of a cash advance is a good one. But most people using a cash advance are going for the convenience. Hauling $5k of coins to the bank won’t be convenient.
Some cards have equal amounts for charging and advances. Depends on the credit worthiness.
July 23rd, 2009 at 3:28 pm
More likely it’s a product of the computer systems used in the transaction (POS v/s ATM). If anyone wants to test it, go to Wal-mart, buy something and select the cash-back option. My guess is that the “cash back” will be considered a purchase transaction since it goes through a POS system and not as a cash advance.