The trick I used to use that was actually tricking myself

Graham1982

Hello everyone:

Usual forewarnings apply, this thread is just for curiosity's sake, it is something I used to do and I don't suggest anybody does it because it is not a solution:

When I was a student that could not or would not budget, my friends and I happened upon a way of paying our minimum payments without actually paying them. You would get your bill, then before it was due, go to a cashpoint, withdraw the minimum payment amount from your credit card, pay it into the bank and then pay credit card.

Can people still do this or has this loophole been closed? Just wondering if my friends and I were the only idiots that did this and for how long you can get away with it before the credit card company did something to stop you.

Kinda reminds me of a documentary I saw where this student kept using his card for cashback and transactions under 7 quid because there was no check in place for amounts of that value or below and as such he ran up debts of thousands upon thousands of pounds. Thank goodness I didn't figure that idea out back then.

Thanks

Graham

DullGreyGuy

Its not a loophole its just accruing more debt to repay debt... I'm sure plenty have done the PayPal Friends & Family payment to themselves/partners etc which used to at least avoid the cashwithdrawl penalty credit cards charge. You can similarly take a Money Transfer deal on a card with an interest incurring debt and use the cash to then pay off the original debt. 

Obviously it naturally closes when you hit the limit of the card unless you are then able to take out another card but having maxed out card only making minimum payment and plenty of cash advances should mean most lenders will say no. 

Brie

There was a time when debit cards weren't really a thing and everyone paid by cheque which took ages to clear.  When I knew things were stupidly tight I would write a cheque from one bank and pay it in to another from which I could then withdraw funds.  I knew I had about 7 days to get the money back into the first bank to cover the cheque.  Most the time it worked.  Sometimes I blagged it into working, huffing at some poor teller as if it was her (always a her then) fault.  Learning to budget would have been less work.

enthusiasticsaver

Isn't there a fee for withdrawing cash off credit cards?  I don't think it is a loophole or trick but it is an expensive way of paying debt and presumably at some point you will hit the limit.  I think it will also be flagged up now as persistent debt if you never repay it. 

I know lots of people who used to do as @Brie did and wrote cheques from one account to another just constantly moving money over to cover the amount.  I worked for a bank after leaving college and they were very hot on staff managing their finances well so I could never go down that route luckily. 

CliveOfIndia

It seems like a very counter-intuitive thing to do, to my mind.  Presumably you're only ever paying the minimum each month, so you're already being saddled with a fair amount of interest.  You withdraw cash - you pay a cash withdrawal fee immediately, and quite often the interest rates on cash withdrawals are even more than for standard purchases.  Seems like a sure-fire way to increase your debt in a very short space of time.

MeteredOut

Sounds like the kind of silly thing someone might post on social media today as a "life hack". 

Glad you saw that it was not a productive thing to do.

Brie

@enthusiasticsaver &  @CliveOfIndia
I think the clue was in the title of the post - he thought it was a good trick (same as mine sort of) but actually knows it didn't work.  

kimwp

Thank you for sharing your experience, I'm sure it will be helpful for others.

vampirotoothus

I used to buy a large item on my credit card and then return it. Quite often the credit was treated as a payment and I wouldn't have to pay them that month, would really help when cashflow was tight. I don't know if it still works as I budget properly now! V x

Graham1982

Yes, around the same time I heard of (but knew it was nonsense) some sort of Freemen of the Land/Sov Citizen thing where you would write some silly tract saying you don't acknowledge the debt because you are a ship (I am obviously being sarcastic) and for this reason you didn't need to pay the debt.

Luckily I think these kind of groups have dropped off.