Asked the CC company to defer min payment for one week

CLAPTON

Coraline wrote: »

I would advise against taking out a cash advance in order to pay the debt. It's called credit card kiting and it's fraud that can get you into trouble.

could you provide a reference ?

[Deleted User]

Coraline wrote: »

I would advise against taking out a cash advance in order to pay the debt. It's called credit card kiting and it's fraud that can get you into trouble.

Banks don't like it as it shows high risk customers, but it's not fraud.

You may be thinking of cheque kiting, which is fraud.

Coraline

Yup, definitely thinking of cheque kiting, which I know is fraud for sure, but I left out the word *might*...I know in my home country credit card kiting is definitely illegal--it's duping the credit card company into taking out more money than you're entitled too.

I shouldn't have said it was fraud for sure, but it is very dodgy.

CLAPTON

Coraline wrote: »

Yup, definitely thinking of cheque kiting, which I know is fraud for sure, but I left out the word *might*...I know in my home country credit card kiting is definitely illegal--it's duping the credit card company into taking out more money than you're entitled too.

I shouldn't have said it was fraud for sure, but it is very dodgy.

if you are within your credit limit why is there any problem?

Coraline

The (potential) problem is because you're taking on purchasing power that you don't have. So withdrawing cash from the card in order to pay off a temporary payment and therefore putting yourself into more debt in the process. You're using the creditor to take out more money in order to pay money that you already owe.

It's like if someone owed you £100, and asked to borrow another £100 to pay off what they owed you!

That can lead to a vicious cycle quickly as the fees and interest on the cash advance is much more than for purchases and if done more than once the card issuer can lead to trouble with the company.

I did some googling and can't find specific laws against in the UK, so I was wrong on that count, but I saw a couple mentions that banks most likely will frown on it here.

bigadaj

Coraline wrote: »

The (potential) problem is because you're taking on purchasing power that you don't have. So withdrawing cash from the card in order to pay off a temporary payment and therefore putting yourself into more debt in the process. You're using the creditor to take out more money in order to pay money that you already owe.

It's like if someone owed you £100, and asked to borrow another £100 to pay off what they owed you!

That can lead to a vicious cycle quickly as the fees and interest on the cash advance is much more than for purchases and if done more than once the card issuer can lead to trouble with the company.

I did some googling and can't find specific laws against in the UK, so I was wrong on that count, but I saw a couple mentions that banks most likely will frown on it here.

You're right in that it's not wise, but not illegal. As a one off it can solve a problem, doing it repeatedly would be costly and damage your credit record.

Coraline

I just foolishly thought it would be illegal here because it's definitely illegal where I come from.

But yeah...like you say it's probably not a good habit to get into!

chattychappy

In the absence of other factors, it's not fraud. Financial crime is my day job (!!).

It carries "health warnings"... I think only the cardholder can decide whether the particularly situation is short term/temporary, or whether they have a more fundamental problem.

Personally I have used this method in three situations:

1) Lost access to my current account. Used cash advances to pay off CCs for a single cycle.

2) Was a few pounds short of paying off the full balance of a CC. Interest/fees on a cash advance was less than the purchase interest I would have paid by not paying the balance in full.

3) Had zero income in the UK for a short time (about three months) whilst earning overseas (but not receiving the monies until much later). Used cash advances in the UK to keep the plates spinning until I could get UK income again. This was risky, but it worked. Had I missed payments for three months, I would have had a seriously damaged credit record. As it was it worked out fine. I had bags of free limit can could have kept the process going much longer if I had to, though of course CCs can be stopped at any time.

Cash advances on some cards are recorded by some CRAs. I think it is only seen as negative when taken with other factors. I get cash advances on Zero every month (sometimes every few days) and don't have a problem getting credit.

TheMoney

What you're asking them to do would render credit files useless. Credit cards are used as short term lending, and you are given more than enough notice of when the payment is due. If you cannot meet that payment when it is due, this would then need to be recorded on your credit file. I understand about having a difficult month, but as you've mentioned this has happened before. When you apply for further credit in the future, lenders need to know accurately how reliable you are at paying debts on time.

CLAPTON

TheMoney wrote: »

What you're asking them to do would render credit files useless. Credit cards are used as short term lending, and you are given more than enough notice of when the payment is due. If you cannot meet that payment when it is due, this would then need to be recorded on your credit file. I understand about having a difficult month, but as you've mentioned this has happened before. When you apply for further credit in the future, lenders need to know accurately how reliable you are at paying debts on time.

total nonsense