Nov 7 • 💰 Funding Formula
How To Obtain Cash Off Your Credit Card Without It Being Considered a Cash Advance
If you go to the bank and ask to get cash off your credit card, they will charge you a “cash advance” rate. Cash advances have extreme rates as high as 30% - 40%. Typically, at least 10% more than the cards current APR.
On top of the high rates, you can only typically obtain less than a third of the total credit line as cash.
Why do banks do this? Well, back a long time ago when credit cards were young, there were some people that took out their entire credit lines as cash and filed bankruptcy. They didn’t care. Credit cards are unsecured. The banks can’t repo what you bought or seek your cash advances. So, they quickly caught on and limited the amount you can take as cash and now charge a premium to do so.
What if you need cash to take advantage of an opportunity where the only access to cash you have is your credit cards? For those that need to pull cash off their cards, here are a couple of options for you to obtain cash from your credit cards at the current APR of your card (even if it’s at 0%).
Plastiq https://www.plastiq.com/
Plastiq gives you the flexibility to pay by credit card — even when your vendors don't accept them. Plastiq sends your payments to your vendor as a domestic or international wire, same-day ACH transfer, or overnight check — however you choose, all in one place.
While having a Plastiq account is free, the service charges the payer the following fees: Credit card and debit card payments: 2.9 percent. Bank-to-bank ACH transfers or EFTs: $0.99. Wire transfers: $8.99 for U.S. domestic, $39 for international.
Various card issuers and payment networks have imposed some restrictions on Plastiq. For example, you can use Plastiq to pay your mortgage with Mastercard or Discover, but not with Amex or Visa. Overall, Mastercard & Discover are the least restrictive followed by business Visa cards.
Melio is a business-to-business (B2B) payment platform that simplifies how small businesses handle their accounts payable. It allows businesses to pay vendors and suppliers, even those who don't accept credit cards, using a variety of payment methods. Melio sends your payments to your vendor as a domestic or international wire, same-day ACH transfer, or overnight check, however you choose, all in one place.
Melio allows businesses to pay almost any business expense, including rent, utilities, suppliers, contractors, and more. It provides flexibility in how you pay, offering options like ACH bank transfer, debit card, or credit card, even if the vendor doesn't typically accept credit card payments. This is useful for businesses who want to use credit cards to manage cash flow and earn rewards, even if a vendor only accepts checks.
Melio offers a free plan with no subscription fees, but charges for certain payment methods and transactions. For example, credit card transactions incur a 2.9% fee, while some expedited payment options have additional fees. ACH bank transfers are free, but expedited ACH transfers have a 1% fee (up to $30). Check mailing is free for the first two checks per month, with a $1.50 fee per check thereafter.
There may be others that do something similar. But take advantage of all the 0% offers you can to propel your business forward, but do it smartly.
Have a plan in place to grow revenue or purchase assets before you get these 0% unsecured credit lines. Take full advantage of the term length at zero percent.
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How To Obtain Cash Off Your Credit Card Without It Being Considered a Cash Advance
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