topic Re: Best way to make a "cash only" purchase with a credit card? in Credit Cards

Best way to make a "cash only" purchase with a credit card?

Autumnslight — Thu, 01 Nov 2012 14:19:08 GMT

I'm considering making a large purchase (about $1,000) from a local seller who only accepts cash, and I'm trying to figure out if there's a good way to do it with a credit card instead of actually using cash. I'm not interested in doing anything shady that violates card member agreements. But, I'd love to get the cash back/points rewards, and use a 0% APR for a couple of months.

I've come up with the following options:

1) Take a cash advance on one card (3% fee), then pay the cash advance fee and BT the $1,000 to another card (3% fee) at 0% APR. Total cost = $1,060. Rewards received = Zero. Net cost = $1,060. Not a great option.

2) See if the seller will accept a gift card for $1,000 to Target/Walmart/Grocery store instead of cash. Buy gift card with credit card. Total Cost = $1,000. Rewards received = At least 1% or $10, possibly more, depending on the card. Net cost = $990 or less.

3) See if the seller will accept a prepaid Amex/Visa/Mastercard. Buy prepaid card with credit card (approximately $3.95 fee). Total Cost = $1,003.95. Rewards received = At least 1% or $10, possibly more, depending on the card. Net cost = $993.95 or less.

Does anyone have any thoughts on my options? Also, does anyone know if there are particular cards that would consider the purchase of a gift card or prepaid card as a cash advance, and charge me fees and interest? Thanks!

Re: Best way to make a "cash only" purchase with a credit card?

Juan123 — Thu, 01 Nov 2012 14:22:49 GMT

If he'd accept a check you can give him a check from your credit card (if they offer that option)

See if he'd accept $1000 trade (something he wants that you can buy with your credit card)

Also don't forget, you can buy an amazon gift card online and that would probably be more useful to him since amazon has everything.

Re: Best way to make a "cash only" purchase with a credit card?

somnipotent — Thu, 01 Nov 2012 14:47:40 GMT

As someone who generally goes the cash only route myself, the Amazon credit works best unless of course he is intending to use that to pay off something. AMEX travelers checks perhaps? At least that has some backing to it whereas I don't trust personal checks unless they're from good friends/family.

Honestly nowadays I use a SQUARE so I can accept payment from pretty much anyone. Works great with my iPhone. Owe me money? Swipe here.

Re: Best way to make a "cash only" purchase with a credit card?

trumpet-205 — Thu, 01 Nov 2012 15:10:45 GMT

Forget about cash advances, as you will be charged for interest on day 1 (which means you pay more than 3%).

Best way to do this is buy high value giftcards and liqudate them. Go to Cardpool/Plastic Jungle and buy $1,000 worth of Target/Walmart giftcard and resell it back for cash. You loss will be around 2% to 3%.

Re: Best way to make a "cash only" purchase with a credit card?

TheConductor — Thu, 01 Nov 2012 15:36:46 GMT

You could also get a Bluebird card, load it with Vanilla Reload cards ($3.95 x 2 for two $500 cards), and then withdraw the actual cash at an ATM.

This would skirt you around the issue of whether the seller would take a prepaid or gift card as payment, and earn you a massive net reward of $2.10. :)

Personally. on a $1000 purchase I wouldn't consider it worth the hassle. 99% of my spending is earning me rewards, so I don't mind letting a little go here and there when I have to pay cash. I can't pay my rent by credit card, but that is the only recurring cash-only expense I have. I'm OK with that.

Maybe if I had the Chase Ink Bold business card and was earning 5 points on purchases at office stores, I'd be a little more eager to do the legwork necessary to use a gift or prepaid card as payment. But for baseline 1% rewards....not really worth my time.

Re: Best way to make a "cash only" purchase with a credit card?

distantarray — Thu, 01 Nov 2012 15:46:58 GMT

is 1 to 2% rewards REALLY worth all this trouble?

$10-20 in rewards, but if the person wants to accept cash it's going to be hard to barter, many people prefer cash because of the transaction fees, or makes it easier to hide taxes etc. depends what kinda business is you could do somethings, but if it was me I would never accept a gift card cause I would have to call in and make sure the amount is in the account, and it's possible even with a legit gift card that you can spend the amount before they get to. (forge a duplicate card)

if he's willing to open up an account like serve that would be better, but convincing people to open accounts just to accept money even if there's no fees when all his customers already accept cash is really a hassle no worth for customers to satisfy your $10-20 reward on a $1,000. Even with Serve there's a ATM fee after 1 transaction, and only being able to pull out about $500 a day you'll be asking him to wait another month just to pull his money out if he doesn't want to pay the $2 and wait til the next day etc.

Re: Best way to make a "cash only" purchase with a credit card?

andre181 — Thu, 01 Nov 2012 16:33:34 GMT

If you have a Discover card and the seller is willing to accept paypal, you could use Discover Money Messenger. Its treated as a normal purchase and earns rewards like normal and has no fees for either you or the person you're sending money too.

Only thing is there is a $400/day and $1000/month cap, so you'd have to do it over 3 days, and if its over $1000 do some this month and some next month.

Re: Best way to make a "cash only" purchase with a credit card?

distantarray — Thu, 01 Nov 2012 17:01:56 GMT

only problem is paypal takes 3% through the transactions =\

Re: Best way to make a "cash only" purchase with a credit card?

Autumnslight — Thu, 01 Nov 2012 17:25:11 GMT

Honestly, it's more about being able to float the balance at 0% for a couple of months. The rewards are just a bonus.

Re: Best way to make a "cash only" purchase with a credit card?

trumpet-205 — Thu, 01 Nov 2012 17:26:22 GMT

Autumnslight wrote:
Honestly, it's more about being able to float the balance at 0% for a couple of months. The rewards are just a bonus.

Ask for a balance transfer check and deposit the fund to your checking account. There is your cash.

Re: Best way to make a "cash only" purchase with a credit card?

distantarray — Thu, 01 Nov 2012 17:30:27 GMT

Autumnslight wrote:
Honestly, it's more about being able to float the balance at 0% for a couple of months. The rewards are just a bonus.

if it's for a "couple" months the intrests are very minimal

Even at 29% interest rate on $1,000 your paying $24 intrest a month (2.42% monthly intrest)

That's assuming your credit card got a default rate due to a missed payment history. Most people should be paying less than $20 in intrest a month, especially if you qualified for a rewards card you should be alright. of course points are huge bonuses. but if you want to charge it on your card, get a serve card, transfer the funds to serve, and take it out yourself and then spend the $1,000 in cash. This way the amount is all on your credit card, I think serve is waiving all the credit card transfer costs til march.

Re: Best way to make a "cash only" purchase with a credit card?

SwampSystems — Thu, 01 Nov 2012 18:02:46 GMT

andre181 wrote:
If you have a Discover card and the seller is willing to accept paypal, you could use Discover Money Messenger. Its treated as a normal purchase and earns rewards like normal and has no fees for either you or the person you're sending money too.

Only thing is there is a $400/day and $1000/month cap, so you'd have to do it over 3 days, and if its over $1000 do some this month and some next month.

This is only true if you are sending money to friends or family. There are fees if it is for a business transaction or purchase.

Re: Best way to make a "cash only" purchase with a credit card?

TheConductor — Thu, 01 Nov 2012 18:25:02 GMT

Autumnslight wrote:
Honestly, it's more about being able to float the balance at 0% for a couple of months. The rewards are just a bonus.

So basically then, you want to spend $1000 of cash you don't have right now?

That's your choice, but I just want to point out that spending behavior like this is the reason many myFICO forumites are here rebuilding their credit. Be careful out there!

Re: Best way to make a "cash only" purchase with a credit card?

Autumnslight — Thu, 01 Nov 2012 19:10:02 GMT

I haven't even entirely decided to make the purchase, but I could use cash if I wanted to. It's more that I enjoy math and problem solving, and I like to see if I can find a way to maximize things to my financial benefit, even just a little. :) If it came down to HAVING to use a cash advance to make the purchase, I just wouldn't make the purchase. The fee is 3%, then the cash advance APR is, on average, about 25%, starting immediately. That's crazy.

But, if I can make the purchase, float it at 0% for a couple of months (through the holidays), AND get rewards, then that makes it more attractive. Ultimately, I'm not going to do this using credit unless my net cost is less than the straight cash cost, so even a BT check won't be my solution here. Definitely a great idea for an emergency/necessary purchase though!