topic Re: Cash advances to boost cash balance at banks in Credit Cards

Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 17:39:34 GMT

I want to increase my bank balance at a couple institutions and am thinking of using cash advances from my existing credit cards to get the money. Is there a risk of hurting my chances at CLIs and new card applications at the credit card issuers by using cash advances - assuming I pay them off and act responsibly with them (balance transfer them out to a 0% card)?

Re: Cash advances to boost cash balance at banks

markbeiser — Sat, 04 Mar 2023 17:48:03 GMT

I don't know about other banks, but BoA will use "recent cash advance" as a reason code for a CLI denial for a few months, even if it is paid back within a couple of days, at least they did for me.

Also seems a bit of an expensive way to gain some cash you don't have an emergency need for.

Re: Cash advances to boost cash balance at banks

K-in-Boston — Sat, 04 Mar 2023 17:55:15 GMT

Credit unions seem to not mind, but most card issuers seem to consider cash advances pretty risky. They're generally intended for emergencies, and doing it repeatedly with some issuers could not only affect CLIs and future applications, but also result in balance chasing or account closure as it appears you are financially struggling by taking out very high interest loans on your cards (even many "prime" cards today can have 30%+ cash advance rates on top of the typical 3-5% fee).

Even with today's high APY returns (like NFCU's current 5.00% certificate), are you sure it makes financial sense after taxable gains, cash advance fees, accrued interest on the cash advance before the balance transfer goes through, balance transfer fees if applicable, and promotional APR if applicable?

Re: Cash advances to boost cash balance at banks

Remedios — Sat, 04 Mar 2023 18:00:03 GMT

@leo187um wrote:
I want to increase my bank balance at a couple institutions and am thinking of using cash advances from my existing credit cards to get the money. Is there a risk of hurting my chances at CLIs and new card applications at the credit card issuers by using cash advances - assuming I pay them off and act responsibly with them (balance transfer them out to a 0% card)?

Taking cash advances is acting irresponsibly. Also, being willing to pay real money to increase imaginary money limit is acting irresponsibly.

If you need to increase "bank balance" that's done by making more money via second job, better paying job, saving more, etc

Your credit report is in infant stages, a year or so means very little to lenders.

Higher approvals and increases will come in time, you don't seem to be patient at all based on last several threads.

Cash advance from major lenders is one way to not get increase. In my opinion, only returned payment can hurt more.

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 18:17:09 GMT

I mean utilization counts only at the statement close date and the amount of money at the bank where you want to get funding matters. Don't see what's wrong with it as long as I make my payments on time and payoff the balance (also makes money for the institution I did the balance transfer with).

Re: Cash advances to boost cash balance at banks

K-in-Boston — Sat, 04 Mar 2023 18:21:41 GMT

@leo187um wrote:
Don't see what's wrong with it

It was explained pretty clearly in the previous replies.

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 18:23:10 GMT

srry didnt see that post when i wrote the reply..maybe do it once every six months or so should be ok.

Re: Cash advances to boost cash balance at banks

GZG — Sat, 04 Mar 2023 18:35:15 GMT

@Remedios wrote:
@leo187um wrote:
I want to increase my bank balance at a couple institutions and am thinking of using cash advances from my existing credit cards to get the money. Is there a risk of hurting my chances at CLIs and new card applications at the credit card issuers by using cash advances - assuming I pay them off and act responsibly with them (balance transfer them out to a 0% card)?
Taking cash advances is acting irresponsibly. Also, being willing to pay real money to increase imaginary money limit is ~~acting irresponsibly~~ probably fraud?
If you need to increase "bank balance" that's done by making more money via second job, better paying job, saving more, etc

Bank: Yeah, he had $10,000 in his account and I made a lending decision based on that.

OP: defaults

Bank: what about that $10,000 you had, oh wait, it wasn't real, welp

I can't think of a not-fraud reason why OP would want to: "increase my bank balance at a couple institutions"

Re: Cash advances to boost cash balance at banks

OmarGB9 — Sat, 04 Mar 2023 18:48:01 GMT

@leo187um wrote:
srry didnt see that post when i wrote the reply..maybe do it once every six months or so should be ok.

I don't think you should do it at all - lenders will view it as you being in financial distress and will shut you down if they see a consistent pattern of taking out cash advances. Bad idea all around. Plus why do you want to give away money to the banks in fees and interest? They're rich enough as it is.

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 19:09:56 GMT

Why is it fraud? I have the right to take a cash advance and put that money wherever I please.

The amount of money sitting in ones institution is definitely a major plus when it comes to funding and I need to garden with institution that gave me the cash advance anyways so dunno why I'm getting this much hate..

I got a CLI and a new card at US Bank and BoA 2 months back so want that cash advance money and put it into those institutions so I can increase my odds at a CLI 3-4 months down the road.

Everyone was talking **bleep** a few months back and I got a NavyFed 20k approval so dunno how qualified the "experts" are on this forum.

Re: Cash advances to boost cash balance at banks

AndySoCal — Sat, 04 Mar 2023 19:23:19 GMT

@leo187um I agree with waht others have said. I looked at one of my credit cards my interest rate if I carried balance was 17.9% the interest rate on cash advance was 26.9% at the time the card holder agreement was sent to me. It is most likely higher now. Credit card company by the APR is telling you it is very high risk type of loan. Two biggest drivers in the underwriting process are the debit to income ratio and credit history. The checking account balance does not mean anything because it is a liquid account. The balance in their today could long gone by tomorrow. I would suggest you have only one checking account. The checking account can be used by bank to see how well you manage your finances. A checking account that is not being actively used can be a problem. Under premise that a banking relationship helps with credit limits and credit limit increases open a savings account only. I am still skeptical if it helps that much at all. Also the increase in balance being reported if it is a large increase will cause other lenders to proceed with extreme caution. Most likely causing the zero balance transfers to go away. I see zero benefit to doing this.

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 19:26:24 GMT

Ok I think you guys are making the assumption that I am going to default on this cash advance... like I said it is to garden pre CLI at the other institutions and everything will be paid off by the time I apply.

Re: Cash advances to boost cash balance at banks

Jnbmom — Sat, 04 Mar 2023 19:32:56 GMT

Worst financial move but you obviously are not taking the advice ........ Most banks will see CA as a serious red flag

I still don't know why people believe you need money with these institutions in order to get high SLs or CLIs . Most every institution I have high lines with and receive CLIs I have the bare minimum in those banking accounts

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 19:32:11 GMT

Ok ok guys I will not do it... first month in the garden...

Re: Cash advances to boost cash balance at banks

markbeiser — Sat, 04 Mar 2023 19:34:16 GMT

Why is the dubious idea of it helping with CLIs so important to you that you are willing to pay a cash advance fee + interest, at high cash advance rates, compounded daily from the moment you take the cash advance until the balance transfere goes through + the balance transfere fee?

It's your money to burn, but it isn't a great plan...

Re: Cash advances to boost cash balance at banks

leo187um — Sat, 04 Mar 2023 19:36:22 GMT

There is no cash advance fee and it is a short term play... by getting a CLI I can lower utilization and the other card has a 0pct for 22 months so if I get the CLI long term it's definitely positive EV

Re: Cash advances to boost cash balance at banks

Brian_Earl_Spilner — Sat, 04 Mar 2023 19:52:12 GMT

If you want to roll the dice and think you can put enough money in the bank to create a relationship in 3-4 months, then go for it. So what if all your lenders see your utilization skyrocket in one month and stay elevated for 3+. If they decide to take AA because your risk increased dramatically instead of giving you a CLI, well they're not the type of lenders you want to do business with anyways. There are plenty of fish in the sea. Amirite? People need to hate the game, not the playa.

Re: Cash advances to boost cash balance at banks

K-in-Boston — Sat, 04 Mar 2023 20:18:26 GMT

@leo187um wrote:

Everyone was talking **bleep** a few months back and I got a NavyFed 20k approval so dunno how qualified the "experts" are on this forum.

Everything that has been stated here is based on years of posts of people stating their experiences with taking out cash advances. It's not like the bank is pulling "cash advance" out of a hat at random when giving them a reason for denials or adverse actions. No one is claiming to be an expert, but if you feel a group's knowledge and experience is unqualified, why ask that group for advice?

While it's usually for short term investment purposes ("a sure thing!"), this is a question that comes up a lot and usually with the same end result when the OP follows up.

Re: Cash advances to boost cash balance at banks

Remedios — Sat, 04 Mar 2023 20:32:53 GMT

@leo187um wrote:
There is no cash advance fee and it is a short term play... by getting a CLI I can lower utilization and the other card has a 0pct for 22 months so if I get the CLI long term it's definitely positive EV

I think you should do it. I mean who cares if peeps on the webz think it reeks of desperation, banks are going to be impressed!!!

Also, if there is no fee, then it's CU card.

So, while you're pretending to be a baller with a few thousands in the bank, you're paying interest since cash advance is not a subject to 0% rate, interest accumulate from the day it posts.

This thread is an example of profound lack of understanding when it comes to credit basics and you aren't willing to even consider what you're being told by people who have cards older than you, so I'm more curious as to why you'd ask a question only to argue with "something something read something, something something there was thread, u do be jealous, something, something something "

Re: Cash advances to boost cash balance at banks

Drifter73 — Sat, 04 Mar 2023 20:49:27 GMT

Almost sounds like a veiled attempt at credit card arbitrage, which is not illegal, but comes with some high risk: https://www.investopedia.com/terms/c/credit-card-arbitrage.asp#:~:text=Credit%20card%20arbitrage%20refers%20to,try%20to%20make%20a%20profit.

Many (if not most) people fail at it and wind-up in more debt. Which is why you're getting so many suggestions to avoid it.

A cash advance comes with a crazy high apy. Even a balance transfer generally comes with 3%, so the hysa being deposited into may only yield 1% to 2% profit (at 4% to 5%apy), and that's still questionable as markets, Credit worthiness, fee structures, and apy can shift in a 12 month span, leaving you holding the debt bag.

To each there own, but for me, tying up mid to high four or five figures for 12 months (to build a relationship) with a shot at 1% roi and multiple variables that could go wrong is a big pass for me.

What ever you decide, good luck.