Thanks!
When you go to a grocery store and want to purchase $12.34 you have several different ways of paying:
If you use the credit card in the example above, you will ultimately have to repay the $50 when the bill is due. The store / credit card company decides the maximum amount of cash you can get above the purchase amount. The store wants an amount that makes the customer happy, but one that doesn't drive their costs too high. The credit card wants it high enough to keep everybody happy, but not so much it becomes a risk for them. You could conceivably do more than one transaction a day.
A cash advance is where you go to an ATM/Bank and get a much larger amount out. The maximum amount is typically 1/2 your credit limit. The actual amount is set by the bank/credit card company. These will have fees, and you going to be charged interest every day until you pay it back. Another way to get a cash advance is to use one of those special checks they send you in the mail. These are a cash advance against your account.
In addition some credit cards have rewards programs. You can earn airline miles, free gifts, or cash back based on the amount of charges you put on the card each month . The "points" or dollars you earn in these programs come from the fees the vendors pay. When you spend money at the store, the credit card company collects a fee of ~2% on the transaction from the store. If you charge a lot each month, and the credit card company makes money even if you pay the balance each month. They fund these reward programs from the vendor fees. Charge $12.34 the credit card company charges a quarter, spend $62.24 they charge a dollar more.
Getting cash from Credit Card is expensive. There are multiple type of charges depending on the Bank;
- A fixed Transaction / cash Advance Charge.
- A percentage fee on the amount of withdrawl.
- Interest from the day of withdrawl till the date of payment. [Unlike purchases, there is no grace period for payments]
Getting cash from Debit card is no charge.
Cash Back is the loyalty bonus when you purchase from some stores [can even be wider] essentially involves passing back some of the fees Bank would make back to the customer.
Edit:
On every card swipe of say 100, the merchant gets only 97.5, the rest 2.5 goes as fees, of which the merchant Bank [where the POS/Gateway is connected] gets 0.5, Card Company [Visa/Master/Amex/etc] get 0.5, the Issuing Bank [the one that gave you credit card] gets 1.5. The reason they get large amount is because they give you a average credit of 30 days [at times 10 days at times 50 days depending on when the transaction was done] ...
If the same bank as POS, then on the transaction the Bank makes both legs of fees, ie 2. It is from this fee, they can pass back a small amount say 1 to you.
Again the above is slightly simplified, the fees and distribution varies from Visa to master and from one Merchant Bank to Other, the Cash Back itself is conditional [tied to places where it has POS] or unconditional for limited period to get more customers, or built with other spedning incentives [ie spend minimum of X amount to get cash bank], essentially encouraging spending and not all may be rewarded, or a cap on the total cash back given.
Call card A up. Negotiate balance transfer fee away/down. Transfer to a card B that has no balance. Get the card B company to send you a refund for your (now) credit balance. Some will let you do a balance transfer to your bank account, which is a bit simpler if it's allowed. If you use the credit card checks, you lose the opportunity to negotiate the rate and fee. You'll just pay the offered rate (which can sometimes be attractive anyway).
