Chase uses the term “cash-like transactions” to refer to specific kinds of purchases that trigger the same expensive terms as a cash advance. Cash advance rules can vary by card, but they often include fees and interest while also disqualifying the purchase from earning rewards, such as cash back, points or miles.
A common example of cash-like transactions, sometimes called "cash equivalents," would be using a credit card to take out cash from an ATM.
Chase expanded its official description of cash-like transactions in 2021, although the policy rolled out at that time mostly just made its existing definition explicit.
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What counts as a cash-like transaction
Chase had long treated some types of transactions as cash-like, such as funding an account for online gambling or purchasing cryptocurrency from an exchange. The 2021 policy update clearly identified them as such and said they would be considered cash advances.
In a notification to cardholders, Chase said cash-like transactions include, but are not limited to, four categories:
- Currency exchange and other forms of payment: Travelers checks, foreign currency, money orders, wire transfers, cryptocurrency, other similar digital or virtual currency and other similar transactions.
- Gambling: Lottery tickets, casino gaming chips, racetrack wagers and similar offline and online betting transactions.
- P2P payments: Person-to-person money transfers and account-funding transactions that transfer currency.
- Third-party bill-pay services: Includes bill-payment transactions not made directly with the merchant or their service provider.
Some of those things, such as lottery tickets, were already considered cash-like transactions in Chase’s previous cardholder agreements. The new definition expanded and clarified what Chase meant by cash-like transactions, it said.
Missing from the list was explicit mention of certain popular payment systems, such as PayPal, Apple Pay, Google Pay, Venmo, PayPal Key and Plastiq. A Chase spokeswoman said at the time that all of those “could” be classified as cash-like transaction. However, purchases of goods and services from a business using a third-party payment service are not cash-like transactions and would not have the associated fees, she said.
So, for example, using a Chase card to fund an in-person retail transaction via Apple Pay or an online purchase via PayPal at checkout would not be a cash-like transaction.
Charitable donations made with a Chase credit card are treated as purchases and would not be cash-like transactions, she said.
And Plastiq said it automatically declines transactions if the issuer treats them as a cash advance.
Why the definition matters
Generally, a cash-like transaction could have these downsides:
- Cash advance fee. This is a one-time fee charged when you take your advance, usually 3% to 5% of the amount.
- Higher interest rate. Many cards charge a higher annual percentage rate for cash advances than for regular purchases.
- No grace period. If you pay your balance in full monthly, you'll usually have a credit card grace period of at least 21 days to pay off purchases before you’re charged interest. Cash advances, though, start to accrue interest from Day One.
- Lower credit limit. Some credit cards have a separate cash advance credit limit, which is lower than the overall credit limit.
- No credit card rewards. Your spending on a cash equivalent probably doesn’t qualify for rewards, such as cash back, travel points or miles. Similarly, it won’t count toward your required spending to earn a sign-up bonus.
What to do if you’re nervous
If you’re concerned about being socked with cash advance fees, you can call the number on the back of your card and request that Chase reduce your cash advance limit. That way, if a purchase turns out to be a cash-like transaction, it will be rejected if it’s over that limit instead of being assessed fees.
If you don’t like Chase’s changes to the definition of cash-like transactions, you can reject them up until the day before they take effect. But then Chase will close your account.
My Chase Loan as an alternatives
Cash advances are an expensive way to get cash. But Chase offers another way to access your credit card’s line of credit besides making purchases, if that’s your goal. My Chase Loan is like a bank loan. Once approved, you receive a deposit directly into your bank account. You have a set amount of time to repay the loan, and you’re charged a variable interest rate, depending on the Chase card you are using for the loan.
