I've got a buddy who is having problems with credit card debt. He had a small business go sour on him and ended up with about 35K of debt that's he struggling to keep under control while looking for a new income source.
In order to keep himself afloat, he's been doing something he calls debt-shifting for the past several months in order to meet the minimum payment requirements on his credit cards. Basically, he's linked several of his cards to Venmo and Paypal, and a few times a month he sends his girlfriend a few hundred dollars (for "rent," etc). The money gets sent to his girlfriend and charges to his credit card, usually for a small fee. His girlfriend then writes him a check for the amount he sent her, he deposits it and uses the funds to help pay the minimums every month. He's basically making the cards pay for themselves. It's not a zero-sum game, since he accrues small fees for each transfer and still has to deal with the interest on the cards, but it's allowed him to keep his head above water the last six months or so as he's been having to pay about 800 dollars in minimums. Apparently it's allowed him to avoid any late payments, which is helping him to stay in reasonable standing with the banks despite the amount he owes.
Now, obviously this is not something any good financial adviser would recommend. Kind of a robbing-Peter-to-pay-Paul kind of thing. Hardly what the banks want you doing either, I'm sure. But my question is whether or not this is technically legal. He says it is, and it kind of makes sense that you're not really stealing from the bank using a strategy like this, but I'm curious, are there any regulations (USA) that make this sort of game illegal?