Stoozing using Credit Card cashback and paypal

Triponi

I have seen a few similar-ish posts on this forum, but nothing that directly addresses it (that I can find) so I will ask the question: I would be interested in comments on whether the following "scenario" would work:

"I have a new Amex credit card which pays 5% cashback in the first three months. If I use the amex to transfer a family member £1000 (as an example) using PayPal I will receive £50 cashback. My family member will receive £1000 less 3.4% (paypal fee for transfer <£1500) i.e. £966. They can send this to their bank account (for free), then do a BACS transfer to me (free), and I can pay the money directly back to the credit card (free). I will therefore have made £14 (or 1.4%), which I can redeem in a years time on my amex bill.

This whole cycle might take a few days (or even less if faster payments are used), and hence can be repeated multiple times in the initial 3 month window, earning myself 1.4% each time."

I would therefore appriecate your help with a couple of questions:

1) Will Amex (Platinum) count a person-to-person (i.e. not via eBay) PayPal transfer as a normal transaction, not a cash withdrawal?

2) How many times can I run the cycle before the bank gets suspicious? And even if they do rumble me, would they be legally entitled to cancel my cashback leaving me out of pocket?

3) Any other obvious faults?

Thanks for your advise,
Triponi

fawinds

From my experience with paypal, I wouldn't worry about the bank, I would worry about paypal.

If they believe there is anything suspicious in your account activity, it will be blocked and funds frozen while they carry out an investigation. And it can mean months... How would you then pay Amex back?

I wouldn't take the risk for such a pittance.

Beckyy

I agree with the above poster, I wouldn't risk it with amounts such as £1000. You could try it with smaller payments though. Can you send via. personal payment on paypal and still get cashback?