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What to Know About Chase's New Policy on 'Cash-Like Transactions'
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What you need to know about Chase's New Policy on "Cash-Like Transactions"
Such transactions can trigger fees and block the purchase from receiving rewards.
The article was written by Gregory Karp Senior Writer | Personal finance, credit cards and score on credit Gregory Karp is a former NerdWallet writer , and an expert on credit cards and personal finance. Journalist for more than 30 years, he has been a newspaper reporter as well as an editor. He has written two books on personal finance, and developed his own "Spending Smart" syndicated newspaper column. His honors include national recognition many times from The Society for Advancing Business Editing and Writing.
Updated April 15, 2022 at 10:17AM PDT.
Edited by Kenley Young, Assigning Editor Credit cards, credit scores Kenley Young is the director of daily credit cards coverage for NerdWallet. Before that, he was a homepage editor and digital content producer for Fox Sports, and before that , a front page editor at Yahoo. He has decades of experience in digital and print media. This includes times as a copy desk chief, a wire editor and an editor of the metro of the McClatchy newspapers chain.
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A LOT LIKE THIS
Chase is using a new and more expansive description of "cash-like transaction," which for Chase credit card users refers to purchases that are subject to the penalties of taking an . Cash advance rules can vary by card however, they usually contain high-cost fees and higher interest while also disqualifying purchases from earning reward points, such as cash back, mile points, or.
An example of transactions that are similar to cash, also called "cash equivalents," could be to use credit cards to cash out cash from an ATM.
To a certain extent, Chase is just making clear its current definition. The changes will be effective at various times, but typically from mid-April to early April 2021.
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What's happening?
Chase in recent times has ruled out certain kinds of transactions, such as opening an account for or from an exchange. The same was true when Chase implemented its new definition of transactions that resemble cash.
If Chase eventually allowed those transactions, they are clearly marked as cash-like transactions and would be considered cash advances.
In its letter for card holders, Chase said cash-like transactions can be classified, but not limited to, four categories:
Currency exchange and other forms of payment: Travelers' checks money orders, foreign currency, wire transfers, cryptocurrency, other similar digital or virtual currency and similar transactions.
gambling: Lottery tickets, casino gambling chips, racetrack bets and similar online and offline gambling transactions.
P2P transactions: person-to-person money transfers and account-funding transactions which transfer money.
Third-party bill-pay services: This includes bill-payment transactions not made directly with the merchant or their service provider.
Certain of these items, such as lotto tickets were already considered cash-like transactions in Chase's previous cardholder agreements. The new definition is more expansive as well as clarifies the meaning of what Chase means by cash-like transactions, it said.
Missing from the list is explicit mention of certain popular payment systems like , Google Pay, Venmo, PayPal Key and . A Chase spokeswoman said each of them "could" be considered a cash-like transaction. However purchasing goods or services from a business using an external payment provider are not cash-like transactions , and would not have the associated fees, she said.
Thus, for instance, using a Chase card to pay for the purchase in person through Apple Pay or an online purchase made through PayPal at checkout wouldn't be considered a cash-like transaction.
transactions made using the use of a Chase credit card are treated as transactions and cannot be cash-like transactions, she said.
And Plastiq states that it will automatically reject transactions if the issuer treats them as cash advances.
The definition of the word is important.
In general, transactions that resemble cash could have these downsides:
The fee for cash advances . This is a once-off fee that is charged at the time you take your advance, usually 3% to 5percent of the total amount.
Higher interest rate. Some cards have an additional annual percentage rate on cash advances than regular purchases.
No grace period. If you pay your total balance monthly generally, you'll have a time frame of at least 21 days to pay for purchases before you're charged interest. Cash advances however begin to earn interest on Day One.
A lower credit limit. Some credit cards have a separate cash advance credit limit that is less than the total credit limit.
There are no rewards on credit cards. Spending money on a cash equivalent is probably not eligible for rewards, such as cash back and travel points or miles. Similarly, it won't count toward your required spending to earn a sign-up bonus.
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What to do if you're anxious
If you're concerned about being socked with cash advance fees or other charges, call the number located on the bottom of the card and request that Chase . This way, if a purchase is found to be a cash-like purchase and is rejected if it's over that limit instead of being charged charges.
If you don't agree with Chase's changes to the concept of transactions that are similar to cash you can reject them up until the day before they go into effect. But then Chase will cancel your account.
What Chase provides as alternatives
Cash advances are an expensive option to earn cash. However, Chase provides another method to get access to the credit line on your card credit, aside from making purchases if that's your goal.
My Chase Loan
It is similar to a is similar to a loan. After approval, you will receive a deposit directly to the account of your bank account. There is a predetermined amount of time to repay the loan and are paying a variable interest rate that is based of the Chase card you are applying for the loan.
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About the author: Greg Karp is a former NerdWallet writer and an expert on personal finance and credit cards. He previously worked at the Chicago Tribune and wrote two money books.
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