Serve cash advance? Don’t panic, and don’t call.

UPDATE:  Serve is no longer safe with some cards.  Please see this post for more details: Some online Serve credit loads now posting as cash advances.

One big advantage of Amex Serve cards over Bluebird cards is that Serve allows online loads via credit card, up to $1000 per month (or $1500 per month if you signup for Serve via SoftCard).

Since yesterday, a bit of a panic has set in since it appears that some cards are suddenly treating Serve online loads as cash advances.  The first I knew about this was from this tweet:

The author of the tweet then found this new thread on FlyerTalk where many people have reported that pending charges for loading Serve are showing up as cash advances.  Strangely, others with the same cards are reporting the opposite.  Travel with Grant summarized the situation here.

What it means

We do not yet know if cash advance fees are really being charged.  Sometimes a bank will code a pending charge as a cash advance, but will change it to a purchase once it moves from pending to actual.  One common example of this is with US Bank credit cards and Amex gift cards.  When US Bank credit cards are used to buy Amex Gift Cards online, the pending amount is treated as a cash advance, but it later changes to a purchase.  Until these Serve online load charges move from pending to actual, we simply won’t know.  It typically takes a few days for pending charges to move to actual.

What to do

1. Do not call your credit card company about the cash advance fee while the purchase is pending.  There’s simply no point to it.
2. If, and only if, you see an actual cash advance fee on your credit card, then call the bank to see if they’ll waive it.
3. Do consider calling your credit card company to ask to have your cash advance limit dropped to zero.  Not all banks allow this, but some do.  One downside to this: with a zero cash advance limit, you might not be able to buy Amex gift cards online or reload Serve online if your bank treats the pending charge as a cash advance but later changes it to a purchase.
4. Consider delaying online Serve credit card loads this month until more is known.

My experience

I always use my Barclay Arrival Plus card for Serve credit card loads.  Here’s why:

1. The Arrival Plus earns a fantastic 2.2% return for all purchases as long as points are redeemed for travel.
2. Switching credit cards often may look suspicious to Amex’s fraud department.  I prefer to keep one card going without changing it.
3. I like the “set and forget” method that I outlined last week: Earn miles automatically, with Serve.

So far this month, I have one Serve transaction that has moved from pending to actual, and that was not treated as a cash advance.  The purchase already shows points earned.  This charge is from October 1, though, so I’m not sure its relevant since reports of the cash advance thing started appearing on October 2nd.

That said, pending charges on my Arrival card from yesterday and today do not appear to be cash advances either.

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