What keeps people from doing this?

[FixMyCredit1992]

Oddly enough, I noticed in line at the local store, someone bought a money order, and pulled out their amex.

This store takes credit cards for money orders, which is odd as many don't.

CC's charge a ton for cash advances, and interest usually starts the second you do it.

So what keeps someone from buying a $2,000 money order, cashing it at their bank, PIF before the due date, and essentially giving themselves a 20-30 day interest free loan?

[juggalo9er]

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@FixMyCredit1992 wrote:

Oddly enough, I noticed in line at the local store, someone bought a money order, and pulled out their amex.

This store takes credit cards for money orders, which is odd as many don't.

CC's charge a ton for cash advances, and interest usually starts the second you do it.

So what keeps someone from buying a $2,000 money order, cashing it at their bank, PIF before the due date, and essentially giving themselves a 20-30 day interest free loan?

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looking around....uh nothing but its highly frowned upon with card issuers, what was the name of the store?

[longtimelurker]

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@juggalo9er wrote:

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@FixMyCredit1992 wrote:

Oddly enough, I noticed in line at the local store, someone bought a money order, and pulled out their amex.

This store takes credit cards for money orders, which is odd as many don't.

CC's charge a ton for cash advances, and interest usually starts the second you do it.

So what keeps someone from buying a $2,000 money order, cashing it at their bank, PIF before the due date, and essentially giving themselves a 20-30 day interest free loan?

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looking around....uh nothing but its highly frowned upon with card issuers, what was the name of the store?

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Right, nothing prevents this unless the store is doing level 3 reporting, which it probably isn't.   There are reports of such stores on FlyerTalk, the names being jealously guarded as too many people doing this would cause a rethink!

But a lot of MS is basically the same, just less direct, having to buy stuff that can be coverted into money orders.

[keithB]

[killer_queen229]

I've never seen any place that offers money orders that allow you to pay anything but Cash. Including the post office. 

[longtimelurker]

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@keithB wrote:

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Possibly, but they really do exist.   At least in some areas, some Asian grocery stores offer this

[FixMyCredit1992]

JW, what's "level 3 reporting".

I work at sears and seen people pay their CC bill with....another CC!

[trumpet-205]

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@longtimelurker wrote:

Right, nothing prevents this unless the store is doing level 3 reporting, which it probably isn't.   There are reports of such stores on FlyerTalk, the names being jealously guarded as too many people doing this would cause a rethink!

But a lot of MS is basically the same, just less direct, having to buy stuff that can be coverted into money orders.

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You don't need level 3 reporting to flag a transaction as cash advance. Simple MCC/Category that codes itself as cash equivalent purchase will do the job.

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@FixMyCredit1992 wrote:

JW, what's "level 3 reporting".

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Level 3 reporting is detailed description of what you bought with your credit card. Basically store uploaded the receipt to credit card issuer.

[killer_queen229]

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@FixMyCredit1992 wrote:

JW, what's "level 3 reporting".

I work at sears and seen people pay their CC bill with....another CC!

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Because you can do that. Some places even let you pay in person, like Kohls.

[longtimelurker]

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@FixMyCredit1992 wrote:

JW, what's "level 3 reporting".

I work at sears and seen people pay their CC bill with....another CC!

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Some stores now provide itemized reporting to the CCs, some Staples being an example.  So the CCC can know what you have bought, and, if they wanted to, could withold rewards on certain purchases, or take AA etc.