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Honest Cheddar: Buying Bitcoin On Credit Is Now A Cash Advance

Frequent Contributor

Honest Cheddar: Buying Bitcoin On Credit Is Now A Cash Advance

https://honestcheddar.wordpress.com/2018/02/12/buying-bitcoin-on-credit-is-now-a-cash-advance/

 

"The MCC has been changed for digital currency purchases by some of the major credit card networks.  The intent of the change was to allow banks and card issuers to charge additional cash advance fees.  These fees are typically higher than your regular interest rate for purchases and starts incurring immediately."




Message 1 of 11
10 REPLIES
Super Contributor

Re: CC Crypto Purchases Now Cash Advance

Additional point ... Cash Advances generally run in the 26% Apr area in addition to the fee charge for most regular banks.
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Message 2 of 11
Super Contributor

Re: CC Crypto Purchases Now Cash Advance

LOL I wonder if the reason is that they pay the CC fees in Crypto cash.
01/23/2018: FICO 829 EQ 827 TU 831 EX
Message 3 of 11
Frequent Contributor

Re: CC Crypto Purchases Now Cash Advance

Banks want a peice of the action... Smiley LOL I'd do the same.

Total CL $97,603 w/PayPal Credit In the garden forever. Smiley Happy FICO8 Score 739, FICO BankCard2 Score 720 Goal 800+
Message 4 of 11
Valued Contributor

Re: CC Crypto Purchases Now Cash Advance

The sad thing is, enough people believe it'll double in 6 months so they won't mind paying CA fees. At least the CA CL is lower, but it's still a foolish decision.


TU FICO 8: 745 (1/18) — Ex FICO 8: 738 (1/18)
Message 5 of 11
Contributor

Heads Up!!! Citi Now Charging Cash Adv Fee's Cryptocurrency

Was not sure of the appropriate place to post this so please feel free to move to the correct area.

Been using my card on Coinbase for many months and it was cash advance fee free. This month though, I guess they figured
(as well as many other companies as Coinbase made announcement that many card companies will now start charging ) they were losing tons of money and somehow justified in their mind
(I disagree ) this was a cash advance.

I was able to get them to waive the first and only $75 charge, but it's not an easy battle so have your heart in it Smiley Happy

My basis for an argument was simple. If you want to change your policy midstream and start to classify a purchase as a cash advance, when prior you did not, you OWE it to me and others to NOTIFY us CLEARLY of that change so that we are given an opportunity to no longer use your card for that purchase.

If you see that the customer has been using a card to make those purchases for many months and has never been charged, the only assumption is going to be that they can continue to use it without a charge.

You want to change your mind, great, that's your option to do so and I cannot argue it. Your card. Your rules. I have the option of not using It.

But the keyword here is rules, and if you're going to change the rules in the middle of the game, and worse, not even notify us of those changes, that is not borderline, but downright deceiving.

My guess is simply this. They are already prepared to receive thousands of calls this month concerning it and I guess they figured if they notified everyone, they would lose more money than if they just charged it and then refunded the ones like me who took it farther than "sorry, at this time we cannot credit you back those fees"

I believe there are some instances where you should yell and scream, but this is not one of them. I was very nice, extremely respectful, spoke my part very articulately and logically and told him that where as prior I really loved Citicards and was PRO Citi, that now because of this misleading and somewhat deceiving situation, it will now leave a very bad taste in my mouth and I would have to share my experiences with social media.

I also thanked him and told him I understood that his hands were tied and this was a corporate situation and that I was not mad at him personally.

That last part seemed to do it, and he said for what it's worth, I really do understand and absolutely agree with you and give me a few minutes and let me see if I can possibly get this done for you by speaking with my supervisor, no promises.

This was about a 10 minute call so be prepared to talk well. He came back and said he got the fee removed and I seriously and genuinely thanked him. Told him it was refreshing to have someone at a corporate level understand the views of their customers.

Maybe this was a rare occurrence, as I do have the gift of gab and the ability to do such things. But also maybe, the upper management has been told to not refund the charges UNLESS customers asks to speak to the supervisor in which case they should.

Good luck in getting your fees removed! They started appearing last week and will be on this months billing cycle.
Chase Sapphire Prefered $30,000
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Message 6 of 11
Regular Contributor

Re: Heads Up!!! Citi Now Charging Cash Adv Fee's Cryptocurrency

I received an email from Coinbase about this.  I hadn't made any transactions recently so wasn't effected.

 

This makes the already absurdly high transaction fees go up even higher for a buy/sell.  Can totally understand how they see it is a cash advance since it is supposed to be used as currency, just like an ATM in a foreign currency to them I guess.

Message 7 of 11
Contributor

Re: Heads Up!!! Citi Now Charging Cash Adv Fee's Cryptocurrency

I do and I don't. Cash advance, unlike Cryptocurrency, can only be used for one thing, CASH.

Cryptocurrency is the purchase of an actual product and because you can convert it into cash later doesn't make it a cash advance.

I can buy a TV at Walmart and have the availability to convert that into cash by selling it. Doesn't make a TV a cash advance LOL.

Almost anything can be bought and converted later into cash, just like coins. Still doesn't make it cash. A "coin" is a "coin" which is an actual product and because it has a value in cash attached to it just like any product you buy in America, doesn't qualify its cash to me.

Least ways let's agree it's a very slippery slope and once you start doing that, it opens the door for lots of other things. I'm sure if somebody wanted to waste their life pursuing them, the courts would probably agree.

Amazing though that I got the same notice from Coinbase, but my own credit card company couldn't notify me..
Chase Sapphire Prefered $30,000
Discover $18,500
Citi Diamond Prefered $12,500
Regions Visa $11,000
Regions Visa $10,000
BOA $10,000
Capital One Spark $8,250
Amazon $5,600
Capital One Quick Silver $5,500
US Bank $2,000

Scores fluctuate wildly and have no goals. Highest score currently 795
Message 8 of 11
Regular Contributor

Re: Heads Up!!! Citi Now Charging Cash Adv Fee's Cryptocurrency


@wrote:
Cash advance, unlike Cryptocurrency, can only be used for one thing, CASH.

Cryptocurrency is the purchase of an actual product and because you can convert it into cash later doesn't make it a cash advance.

I can buy a TV at Walmart and have the availability to convert that into cash by selling it. Doesn't make a TV a cash advance LOL.

I think you are construing some things.  Bitcoin is currency, just like you said, twice.  Cash is also currency.  Bitcoin is not at all like a TV.  I can't buy things online in TV's.  I can buy things online in Bitcoin, though.

Message 9 of 11
Moderator

Re: Heads Up!!! Citi Now Charging Cash Adv Fee's Cryptocurrency


wrote:

wrote:
Cash advance, unlike Cryptocurrency, can only be used for one thing, CASH.

Cryptocurrency is the purchase of an actual product and because you can convert it into cash later doesn't make it a cash advance.

I can buy a TV at Walmart and have the availability to convert that into cash by selling it. Doesn't make a TV a cash advance LOL.

I think you are construing some things.  Bitcoin is currency, just like you said, twice.  Cash is also currency.  Bitcoin is not at all like a TV.  I can't buy things online in TV's.  I can buy things online in Bitcoin, though.


Agreed.   Cryptocurrency is a decentralized currency.   And currency in its various forms is a "cash equivalent" to most lenders.   And anyone who has ever read their T&Cs has seen the words "cash equivalent" before.   I'm honestly surprised it has taken lenders this long to enforce it.   

Sure, a TV could be currency, but as most people don't want to carry TVs around with them all day and few businesses would want to accept them as payment, TVs are not used as currency anywhere, to my knowledge.   

This reminds me of a funny story about an electronics store in the '80s who ran a TV ad displaying stereos for sale for "299 bananas".   Well, as it turns out, some people figured out that buying 299 bananas at that time only cost between $40 to $60, so they went to stores and paid with bananas.   Because the store advertised them as acceptable currency, they had to honor their ad.   Needless to say, many zoos and food banks wound up getting lots of bananas from the store.  

 



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