If you don’t pay off your monthly credit card statement in full you will have to pay 25% interest until its paid off, not fun. So instead as a fail safe, I created 2 cashapp accounts, 1 attacked to my checking account for my bank, and 1 attached to my credit card.
I now understand so much about my country if this is the financial literacy people have…
Financial literacy is avoid not paying your statement at all costs.
I literally gave myself an extra month to pay it off by paying off my card with my card though what is probably a loophole that they just aren’t willing to fix or enforce
So to actually give you some amount of answer about why what you’re doing is historically not a good move: most apps and services that allow you to charge a credit card to get cash, is called a cash-advance and it usually comes with extremely high fees and higher than normal apr that make it not very attractive for people to use, and downright predatory for people that don’t know about the high fees.
For example, here’s what capital one says about it:
https://www.capitalone.com/help-center/credit-cards/get-cash-advance/
So maaaybe you’re not being charged this fee/apr, maybe you are, I’m not sure because i don’t use cashapp, but if you aren’t being charged this fee from cashapp or your credit card directly, its probably because cashapp is losing this money, trying to entice customers to its platform, as a “courtesy service” to its customers.
Digging into this further, here’s the fees I found for capital one:
"The Capital One cash advance interest rate is usually 29.99% (V). The interest rate applicable on cash advances is typically higher than what is charged for other card purchases and it will start accruing as soon as the advance is granted as there is no grace period for it.
You’ll also be charged with a cash advance fee of 3% or a $5 minimum."
So instead of paying 25% APR on your old balance, you’re now paying 30% APR with a 3% fee on the new balance.
https://wallethub.com/answers/cc/capital-one-cash-advance-fee-1000237-2140768055/
you’re the type of person I HATED getting calls from when I worked for visa…people would do dumb shit like this app the time, then be shocked when interest started being added that they didn’t account for but they were too uneducated to actually understand how and when charges are applied.
Yes, this is definitely it - a loophole. No way credit card issuers are smart enough to put up guardrails against this.
… yes, that was sarcasm.
To clear up another point:
If you don’t pay off your monthly credit card statement in full you will have to pay 25% interest until its paid off
You’re not charged 25% interest until you pay it off, you’re charged 25% interest split over the year, daily. So .25/365
So if you’re balance is $1,000 and you don’t pay it for 2 months, you owe:
$1000 + $1,000x(.25/365)x30 days = $1020.54 the first month
$1020.54 + $1020.54x(.25/365)x30 days = $1041.51 the second month
Hey guys lpt if you get enough credit cards you can pay them all off with one another!
If your house is beginning to burn, start another fire in a different part of the house so the original fire can’t get it. Genius!
Do you know what cashapp or venmo is? You aren’t opening another credit card, you are transferring money to your bank account and then quickly paying off your balance resulting in the same amount owed with another month to pay it.
Yes, I know what they are.
This sounds sufficiently similar to “Check Kiting” that I’d be extraordinarily surprised if it is not considered fraud.
This should be in ULPT or SLPT, not LPT.
Instant withdraws typically begin incurring interest immediately, not at the end of the payment period. Otherwise anyone could do this (with or without venmo/cashapp) and never pay interest on their credit card debt.
Better idea: set up a separate account and save enough to cover your credit limit. Then save it for when something comes up and you can’t pay your bill.
Wait what??
Why does my credit card have ball acne?
