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With the Platinum Cashback Everyday Credit Card, there is a 5% cashback reward for the first 3 months, up to £100. As such, I'm trying to maximise my spending during this period to make the most of this.

I regularly have to send my friends money with PayPal for split bills etc, so was wondering if it was worth sending money in future via my Amex instead of straight from my current account within PayPal.

I know that you can use PayPal at checkouts and select Amex as the method of payment as a way of using the Amex when a shop might not otherwise accept it, but I wondered if the same applied for sending cash to friends and family, or are there some rules/fees that make this non-viable?

Furthermore, if this were possible, surely I could max out my spending every month by sending money to my friend via Amex in PayPal, then getting them to bank transfer it back to me?

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You can transfer money to friends and family this way, and Paypal don't charge any additional fees, but Amex treat this as a "cash advance" and hence charge higher fees / interest on it and it is not eligible for cashback.

Source: I am in the UK, have a Paypal account which is linked to both my Amex card and my bank account, and regularly transfer money to friends and family members this way. When I initially set it up (several years ago now) I tried using Amex in this way and it resulted in the transfer being treated as a cash advance. I now always use the bank account as the source for the transaction and this works fine with no fees being charged at any stage.

From the link you included in the question, the relevant Ts&Cs clearly show that cash advances a) have a higher interest rate than purchases, b) accrue a fee of 3% or £3, whichever is larger, c) start accruing interest on the date of the transaction (i.e. no grace period to the end of the billing cycle as there is on purchases) and d) are not eligible for cashback.

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  • This means that Paypal passes the details of the transaction through to the credit card, i.e. whether it was a store purchase vs a money-to-friend transaction. Good to know. – JTP - Apologise to Monica Nov 18 '20 at 11:13
  • Brilliant, thanks for your answer, this is exactly what I was looking for. Can I just double check what you have been able to pay for via the Amex linked to your Paypal account - e.g. does using Amex through PayPal at a secure checkout for an online store work as expected? – Rocco Nov 18 '20 at 15:17
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    Yes, I use Amex via Paypal for everything else and it works perfectly fine (treated as a purchase). I even have found that charity donations via Paypal / Amex work OK too and are treated as purchases. – Vicky Nov 18 '20 at 16:33
  • Great thanks, that's good to know. I assume it would also work like a normal purchase if I send a payment to someone under 'Goods and services', though the person receiving eats a ~3% fee? – Rocco Nov 18 '20 at 23:24
  • I don't know, I haven't tried that. – Vicky Nov 19 '20 at 12:07
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Years ago, a bank offered a 10% cash back for grocery store, gas station, and drug store purchases. I wondered if buying a $500 Visa gift card at the drug store would work or if it was somehow an invalid transaction.

Long story short, I bought $50,000 worth of cards over the 90 days the deal was offered. The card cost $5 in fees, so I was ahead $4500.

The answer for you is to test the system. Send a $100 amount, and see the result. In my case, the risk was the $5 fee on one card. When I saw the $50 credit show up, I knew I was good to go.

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  • Thanks for your response, I'll see if anyone gets back to me highlighting any glaring rules and fees that might prevent me from doing this. If not, I might give it a try. – Rocco Nov 17 '20 at 14:26
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    I think the main question is whether the transaction gets classified as a cash advance or similar - the Amex rules probably exclude cashback on those. – GS - Apologise to Monica Nov 17 '20 at 14:33
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    @GS-ApologisetoMonica That's exactly what I'm worried about, I worry if they'll classify it as a cash advance or not – Rocco Nov 17 '20 at 14:44
  • Right, as was I. The question for me was whether the gift card carried a use code that made the purchase not count towards their offer. – JTP - Apologise to Monica Nov 17 '20 at 16:19
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Hmmm. I've made many (15+) transfers using paypal friends and family and my amex over the past 2 years. Never had it treated as anything other than a regular paypal transaction i.e. no fees as a cash withdrawal or separate interest rules applied

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