Barclaycard Rewards Card - ATM Cash Advances

born_again

https://forums.moneysavingexpert.com/discussion/comment/82027028#Comment_82027028

It is as it is tagged as cash, not purchase.

sausage_time

Does anyone have hard evidence of using such a card this way (cash advance, paid back in full) impacting ability to get further credit, mortgage, etc?

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82027245#Comment_82027245

You said "Makes no difference if you are paying interest of not.". So what is the difference, as far as an underwriter or anyone assessing creditworthiness is concerned, between spending on a credit card and withdrawing cash and then (presumably) spending it?

It's clear that interest and fees do matter, because they're the reason that withdrawing cash can be seen as indicating bad financial management or credit risk. If cash was treated the same or similar to spending then it's just as sensible to withdraw cash as it is spend on a CC.

However it appears underwriters etc may not get a full picture, ie won't know whether someone is using a zero fee card or a high fee card for cash. But I would hope they'd use their common sense and if someone who makes regular cash withdrawals on a CC but doesn't have any other signs of bad financial management, they'd realise that perhaps they are using the CC for cash sensibly as they should know is perfectly possible with a little understanding of CC products available in the market

born_again

https://forums.moneysavingexpert.com/discussion/comment/82027842#Comment_82027842

The point is people are taking out cash using a credit facility. Which by implication means they do not have funds eleswhere, so is seen as poor management & a greater risk of non payment of debt.

As far as it goes the interest rate does not come into play, if a application goes for manual review.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82027446#Comment_82027446

The only people that will are those that work in underwriting credit given anyone who's declined will only be given a generic message about not meeting their appetite and to go check your credit history. Those who work in underwriting arent going to be authorised to share corporate information onto a public forum.

Given MSE has a comparison tool for credit surely you have people internally who know who built it or relationships with lenders who could tell you?

Certainly it shows up as a cash withdrawal and my understanding is that lenders will see it negatively in a similar way to a missed payment or going over a limit; ultimately a single occasion for a person that is otherwise a good risk is unlikely to change the outcome but declines for credit are more often a death from a thousand cuts and its a combination of factors in total that gets the decline rather than a single factor giving an auto-decline

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82028309#Comment_82028309

No it doesn't! Someone with a BC rewards card could be using it for day to day spending and cash withdrawals, both of which they pay off every month on time and pay no interest or fees. There is no difference between using it for cash and spending. They could spend on a debit card, they could withdraw cash on a debit card. But it's more efficient and easier to budget to use the BC rewards for both so there's one monthly bill and there's no extra cost in doing so, in fact it could save interest.

Perhaps some underwriters and others who assess creditworthiness don't have the intelligence or knowledge to understand that such cards exist and similar have existed for decades, so it's not always a sign of bad financial management. But IME of withdrawing cash on CCs regularly for decades, it's not done my credit score or ability to get quite high credit limits much harm if any.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82028352#Comment_82028352

The problem is that the credit files do not show which product you have or what charges you did or didnt have, all it will show is that the person is taking out significant amount of cash on a Barclays issued credit card. They will see no interest was charged but won't see if any fees were charged or not.

Underwriting is typically done by an algorithm in milliseconds, there isnt the margin in most lending to have human reviews, exchange of evidence, build a more complete picture etc. whilst there are some credit products that dont charge they have the small minority and given they cannot be identified by the data available then broad brushstrokes apply.

There are millions of similar things that could be explained away, a neighbour recently found they have a CCJ after being declined for a new loan. Turned out their insurer was slow paying a court judgement after there was a dispute on quantum of an injury after a fault accident. Again, evidence could be sent to show it wasnt his financial mismanagement but his insurers fault but instead the algorithm will simply decline for the CCJ.

born_again

https://forums.moneysavingexpert.com/discussion/comment/82028352#Comment_82028352

See above reply.

You can not expect any staff member to know every product & it's features on the marketplace. All they see is a marker for a cash transaction, if it even reaches a human.

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82028392#Comment_82028392

Yup, I get that if it's done by an algorithm then it'll probably just see CC cash advances as bad, but when reviewed by a human I'd have thought they'd use a bit of intelligence and knowledge.

Some decisions are a bit strange, the only time I've been declined for a credit increase was when I was buying a car and I needed the entire credit limit for the deposit, BC declined it on my cashback card, so I had to mess around with manual payments to avoid exceeding the credit limit, but then a month later they offered me a big limit increase on my other BC (the Rewards one which I'd used regularly for cash)!