Cash Advance Checks Review
Author: shan
Posted: Wed Aug 16, 2006 5:28 pm
Post subject: Cash advance checks
Can someone explain how cash advance checks work please? I have a BofA/MBNA card and want to deposit the check into my BofA checking acct, then use some of the money to pay that card and my other BofA card. I know that you can't use it to directly pay a card with them, but can you make it out to yourself and then pay them? Will they track that through my checking acct? Also, it is 0% APR for a year, but 3% fee which is labeled as a finance charge. Will that finance charge compound if I carry a balance? If so, can I pay the finance charge seperate from the balance? Thanks for your help!
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Author: fire3000
Posted: Wed Aug 16, 2006 7:30 pm
Post subject:
They send me those convenience check frequently. When I decide to use one, I make the check out to myself and deposit it into a checking account other than my BoA account or to my HELOC lender (Wachovia). If it is a BT offer only, the check must be written out to one of your creditors. If there is a fee charged, it will be added to your balance at the start of your next statment. Regular rates may be accessed on the fee and you can not pay the fee off until the rest of the balance is paid off. The fee is a one time charge and if you carry a balance the stated low rate will apply to the amount of the check used. Purchases made before or after the check is used are charged the regular purchase rate unless the offer states otherwise. If your payments are on time and your credit reports stay positive, they will not rate jack until the end of the low rate period or until the check amount is fully paid as stated in the offer.
Author: multiplierx
Posted: Wed Aug 16, 2006 7:36 pm
Post subject: Cash Advance Checks Review
That's the catch with BTs. The fee will accrue interest while the 0% is paid off. You can't seperate the charges.
The only true 0% BT is 0 fee.
_________________
Total interest paid on cards = 0.00
Amount of cash/rewards in past year = $550
Utilization - less than 1%
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: shan
Posted: Wed Aug 16, 2006 11:54 pm
Post subject:
Ok, thanks. I figured there was a catch with that fee.
So, it's best not to deposit into my BOA acct then? I was thinking of opening Citi checking and e-savings accts anyway. I guess I can use those.
Author: Bikshu
Posted: Fri Aug 18, 2006 7:47 am
Post subject: Cash Advance Checks Review
No, you guys are only partially correct. MBNA/BOA transaction fees are billed at the promotional rate only. If its a 0% promo rate then its a 0% rate on the BT fee as well, if its a 1.99% promo rate then its 1.99% on the BT fee, etc. The fee is simply added into the Category A balance along with the transfer amount. When the promotional rate expires, then and only then will any remaining part of the BT fee reclassify to Category D at the contract rate. I do not know about policies at other banks, but I work in the transfer division of MBNA so take my word for it on this one...
Additionally, it does not matter in the least what bank's checking account it is deposited into. As for your plan for the funds once they reach your checking account, that will depend on which accounts you are trying to pay off. As long as you are trying to pay off completely seperate card accounts from this 0% card, you will be able to pull it off. Just make sure you take a different amount at the 0% than you pay back on the other cards (example: take only $5,000 at the 0% but pay back $4,000 on one card and $1,500 on the other). This makes it virtually impossible for the bank to prove what you did with the funds.
You will not, however, be able to take funds at the 0%, put them into your checking account, and then pay off any existing balance on this same exact 0% card. This is because of the payment allocation method: your next payments to the account will pay back the 0% funds from your checking account and not the prior existing balance.
By the way, we don't have the payment allocation method to be mean. It became standard banking policy because long ago (very long ago) people were taking advantage of the banks when they did not have this policy. What was happening was people were running up huge amounts of purchases up to around 50% of their total credit line. They would then take the other 50% of the credit line as a deposit to their checking account at the promotional rate and pay off the purchases. Everyone who knew about the loophole was getting virtually a permanent 0%, 1.99%, etc. rate. There was no reason to even get a home equity line, car loan, or student loan as long as you had a sufficient credit card line. The banks were all hemorraging money, and had to come together to find a way to prevent people from taking advantage of them. So this all came about quite literally as the result of customers screwing the banks, not vice-versa.
One last thing: ALWAYS call in and have a representative in my department process an ACH into your checking account rather than using an access check. Reasons:
1. We are faster. My ACH goes into your checking account within 4-6 business days at the absolute latest. The access checks are designed so that we will not honor one if it is presented for immediate cashing, and are typically held for at least seven business days to prevent fraudulant use. If your local bank offers to cash it any sooner than this, than that is their money they are fronting you... not mine. Thus, you even run the risk of having the transfer considered an ATM/Bank cash advance and paying those respective rates and fees simply because your bank broke our rules.
2. I will never ever have a worse rate than what is offered on your access checks. Almost 90% of the time I will have a better rate available though, so you never know what I'll do if you just ask nicely. I will also take the time to personally answer all of your questions and go over all of the terms and conditions with you. Remember, anything access checks can do I can do better, I can do everything better than access checks...
3. Although I am not on commission per se, my pay check is definitely affected by the volume of transfers I do each day. That stupid little access check does not recieve a paycheck and does not have any bills to pay. Please help me justify my own working existance... pretty please?
4. There are often various types of SNAFUs on your account which result in the promotional rate being removed from your account or differing from what the letter originally specified. Maybe your payment last month came through a day late and you don't even realize it yet because you haven't gotten your new statement yet. A million situations like this occur each day and then the cardholder calls me up screaming that its my fault their access check didn't work as they had planned. And you know what? I will very gladly refuse to correct the situation. How can I be so cruel you ask? Please see reason number three...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Wed Aug 16, 2006 5:28 pm
Post subject: Cash advance checks
Can someone explain how cash advance checks work please? I have a BofA/MBNA card and want to deposit the check into my BofA checking acct, then use some of the money to pay that card and my other BofA card. I know that you can't use it to directly pay a card with them, but can you make it out to yourself and then pay them? Will they track that through my checking acct? Also, it is 0% APR for a year, but 3% fee which is labeled as a finance charge. Will that finance charge compound if I carry a balance? If so, can I pay the finance charge seperate from the balance? Thanks for your help!
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: fire3000
Posted: Wed Aug 16, 2006 7:30 pm
Post subject:
They send me those convenience check frequently. When I decide to use one, I make the check out to myself and deposit it into a checking account other than my BoA account or to my HELOC lender (Wachovia). If it is a BT offer only, the check must be written out to one of your creditors. If there is a fee charged, it will be added to your balance at the start of your next statment. Regular rates may be accessed on the fee and you can not pay the fee off until the rest of the balance is paid off. The fee is a one time charge and if you carry a balance the stated low rate will apply to the amount of the check used. Purchases made before or after the check is used are charged the regular purchase rate unless the offer states otherwise. If your payments are on time and your credit reports stay positive, they will not rate jack until the end of the low rate period or until the check amount is fully paid as stated in the offer.
Author: multiplierx
Posted: Wed Aug 16, 2006 7:36 pm
Post subject: Cash Advance Checks Review
That's the catch with BTs. The fee will accrue interest while the 0% is paid off. You can't seperate the charges.
The only true 0% BT is 0 fee.
_________________
Total interest paid on cards = 0.00
Amount of cash/rewards in past year = $550
Utilization - less than 1%
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Author: shan
Posted: Wed Aug 16, 2006 11:54 pm
Post subject:
Ok, thanks. I figured there was a catch with that fee.
So, it's best not to deposit into my BOA acct then? I was thinking of opening Citi checking and e-savings accts anyway. I guess I can use those.
Author: Bikshu
Posted: Fri Aug 18, 2006 7:47 am
Post subject: Cash Advance Checks Review
No, you guys are only partially correct. MBNA/BOA transaction fees are billed at the promotional rate only. If its a 0% promo rate then its a 0% rate on the BT fee as well, if its a 1.99% promo rate then its 1.99% on the BT fee, etc. The fee is simply added into the Category A balance along with the transfer amount. When the promotional rate expires, then and only then will any remaining part of the BT fee reclassify to Category D at the contract rate. I do not know about policies at other banks, but I work in the transfer division of MBNA so take my word for it on this one...
Additionally, it does not matter in the least what bank's checking account it is deposited into. As for your plan for the funds once they reach your checking account, that will depend on which accounts you are trying to pay off. As long as you are trying to pay off completely seperate card accounts from this 0% card, you will be able to pull it off. Just make sure you take a different amount at the 0% than you pay back on the other cards (example: take only $5,000 at the 0% but pay back $4,000 on one card and $1,500 on the other). This makes it virtually impossible for the bank to prove what you did with the funds.
You will not, however, be able to take funds at the 0%, put them into your checking account, and then pay off any existing balance on this same exact 0% card. This is because of the payment allocation method: your next payments to the account will pay back the 0% funds from your checking account and not the prior existing balance.
By the way, we don't have the payment allocation method to be mean. It became standard banking policy because long ago (very long ago) people were taking advantage of the banks when they did not have this policy. What was happening was people were running up huge amounts of purchases up to around 50% of their total credit line. They would then take the other 50% of the credit line as a deposit to their checking account at the promotional rate and pay off the purchases. Everyone who knew about the loophole was getting virtually a permanent 0%, 1.99%, etc. rate. There was no reason to even get a home equity line, car loan, or student loan as long as you had a sufficient credit card line. The banks were all hemorraging money, and had to come together to find a way to prevent people from taking advantage of them. So this all came about quite literally as the result of customers screwing the banks, not vice-versa.
One last thing: ALWAYS call in and have a representative in my department process an ACH into your checking account rather than using an access check. Reasons:
1. We are faster. My ACH goes into your checking account within 4-6 business days at the absolute latest. The access checks are designed so that we will not honor one if it is presented for immediate cashing, and are typically held for at least seven business days to prevent fraudulant use. If your local bank offers to cash it any sooner than this, than that is their money they are fronting you... not mine. Thus, you even run the risk of having the transfer considered an ATM/Bank cash advance and paying those respective rates and fees simply because your bank broke our rules.
2. I will never ever have a worse rate than what is offered on your access checks. Almost 90% of the time I will have a better rate available though, so you never know what I'll do if you just ask nicely. I will also take the time to personally answer all of your questions and go over all of the terms and conditions with you. Remember, anything access checks can do I can do better, I can do everything better than access checks...
3. Although I am not on commission per se, my pay check is definitely affected by the volume of transfers I do each day. That stupid little access check does not recieve a paycheck and does not have any bills to pay. Please help me justify my own working existance... pretty please?
4. There are often various types of SNAFUs on your account which result in the promotional rate being removed from your account or differing from what the letter originally specified. Maybe your payment last month came through a day late and you don't even realize it yet because you haven't gotten your new statement yet. A million situations like this occur each day and then the cardholder calls me up screaming that its my fault their access check didn't work as they had planned. And you know what? I will very gladly refuse to correct the situation. How can I be so cruel you ask? Please see reason number three...
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 9:13 PM
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