Credit limit reallocation with Wells Fargo Reflect 0% Balance Transfer

[UncleB]

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@KatzNDawgs wrote:

So WF doesn't consider a BT to checking account as a cash advance? If so, I was not aware of that.

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That's a "loophole" with many (most?) banks... unless you need cash immediately, let them BT to a checking account (or use a BT check) and it won't be considered a cash advance.  Another perk is that BTs are usually not restricted to the account's cash advance limit.

It's an odd distinction, but apparently the bean counters employed by the banks have data that says those who go the BT route are less risky than those who go to an ATM or teller for the cash. ¯\_(ツ)_/¯

[KatzNDawgs]

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@UncleB wrote:

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That's a "loophole" with many (most?) banks... unless you need cash immediately, let them BT to a checking account (or use a BT check) and it won't be considered a cash advance.  Another perk is that BTs are usually not restricted to the account's cash advance limit.

It's an odd distinction, but apparently the bean counters employed by the banks have data that says those who go the BT route are less risky than those who go to an ATM or teller for the cash. ¯\_(ツ)_/¯

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Interesting, thank you! Is there a list somewhere with known banks that do this? I had to take my dog in for emergency care a few years ago at the tune of 15k (thank goodness for insurance but need to wait for reimbursement). Since I hadn't used my USAA credit card in so long, the one I had in my wallet was expired. I called them to see what could be done, and they cash advanced (not BT) to my checking so I could use my debit card.

[JdsFico]

@hdporter I didn't do the math at first but I figured because it was 5% on the initial balance, but the period is close to two years vs 1 year (21 months), it would be lower than 5% apr. I did a simple apr calculator on 5k at 5% (fee would be 250 over 21 months) and the apr to pay that off would be around 5.3% which would coincidentally also be a $250/month payment for 21 months, $5250. A BT does have the benefit of not requiring you to pay it off completely in 21 months but you're left with the balance, a similar loan of 5.3% or a BT that you paid $250 per month towards would both pay off in the same amount, so your estimate of 6% was definitely closer than my estimate of 3%. Still better than any balance at a 20+% apr that credit cards somehow are allowed to charge...

[UncleB]

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@KatzNDawgs wrote:

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@UncleB wrote:

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That's a "loophole" with many (most?) banks... unless you need cash immediately, let them BT to a checking account (or use a BT check) and it won't be considered a cash advance.  Another perk is that BTs are usually not restricted to the account's cash advance limit.

It's an odd distinction, but apparently the bean counters employed by the banks have data that says those who go the BT route are less risky than those who go to an ATM or teller for the cash. ¯\_(ツ)_/¯

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Interesting, thank you! Is there a list somewhere with known banks that do this? I had to take my dog in for emergency care a few years ago at the tune of 15k (thank goodness for insurance but need to wait for reimbursement). Since I hadn't used my USAA credit card in so long, the one I had in my wallet was expired. I called them to see what could be done, and they cash advanced (not BT) to my checking so I could use my debit card.

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USAA is a special case when it comes to cash advances... they don't have a separate APR and credit line for cash advances, just the cash advance fee.  Just keep in mind that with a cash advance you lose your grace period, so unlike if you had used your card interest starts accruing immediately.

As for a list of banks that don't treat BTs as cash advances, so far all the banks I've used have been consistent in that none have.  I've done BTs with NFCU (multiple), Discover, USAA (multiple), Truist, Wells Fargo, PNC (multiple), BoA (multiple) and it's been the same with all of them - the BT balance is separated out on my statement (usually with a promo APR).  I've also received BT promo offers from Citi, Chase, and U.S. Bank and the offers indicate they would work the same way, so it might be easier to list the banks who are outliers (so far I've never dealt with one that is).

Some folks warn against BT offers, and I agree that without discipline they can be problematic if one is tempted to overspend, but in my case they've come in handy numerous times (see above bank list, ha).  I tend to make large planned purchases with cards that have a good cash back rate, then whatever fee is charged by the BT bank is mostly cancelled out (occasionally I even have a little left over if the BT promo is good enough). 

[JdsFico]

The distinction with some of the banks though is if they allow BT to a checking account. I'm not sure how common that aspect is, a lot want you to enter the account/credit card for them to pay the funds to. I know discover lets you deposit to checking account, might just vary based on which cards you use for BT. I have a Citi diamond and I think it wanted to pay directly to a credit card with a balance but don't remember exactly. WF reflect comes with checks and obviously can go right into checking account.

[UncleB]

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@JdsFico wrote:

The distinction with some of the banks though is if they allow BT to a checking account. I'm not sure how common that aspect is, a lot want you to enter the account/credit card for them to pay the funds to. I know discover lets you deposit to checking account, might just vary based on which cards you use for BT. I have a Citi diamond and I think it wanted to pay directly to a credit card with a balance but don't remember exactly. WF reflect comes with checks and obviously can go right into checking account.

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This is very true.

I've received checks from most of my banks, and you'll also find the occasional oddball like PNC that adds a restriction that checks be made payable only to a business (how/if that is actually enforced is questionable, but I wouldn't want to test it). 

Come to think of it, I think the only card I have who has not sent me checks is Citi, even though they pester me at least weekly with a BT promo offer.  Until recently I could have also said Chase, but just a week or so ago I received some checks from them as well (for the first time).

I used to prefer using the checks (considering it simpler) but now I usually just let the bank send over the BT themselves (it's impossible for that to bounce).  Since I PIF most cards each month it's easy enough to just let the BT pay off one of the PIF cards, then use the funds I had earmarked for that payment on whatever I needed the BT for.

[JdsFico]

@UncleB I haven't used the checks but I've been sent them with a few cards. I prefer the deposit into a checking account method but I had to call them for that, although it actually worked faster than a BT paying another card's balance for me. The deposit into a checking account was overnight and one card paying another is like a week to post sometimes.

The other benefit of the checking account route is that you could pay a card within that same bank. They specifically say you can't use BT within the same bank, like a wells fargo reflect BT to pay a wells fargo active cash card balance, but once it is in the checking account you can use it within the same bank anyway. Might be more useful on some of the premier travel cards like using a Chase freedom unlimited balance transfer to pay towards a big balance on a chase saphire reserved. Obviously better to just PIF but if you dropped 15k on the card on some trip, used a BT to pay it off, then you'd have 12-24 months or whatever to pay off that 15k and still get all the points on the CSR.