(Update: About To Go Live) Updated Chase Card Cash-Like Transaction Terms: What It Might & Might Not Mean

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Update 4/7/21: This is just a quick reminder that Chase’s changes regarding what’s classified as cash-like transactions comes into effect in a few days on Saturday April 10. If you’ve been using Chase cards for Plastiq payments, PayPal Key, etc., you might want to pause those kinds of payments until there are data points provided as to what’s actually being affected by these changes.

Update: Chase is sending these emails out for personal cards too.

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Chase has sent out emails to business card holders today advising of a change as to what will be classified as cash-like transactions from April 10, 2021.

Question mark

The email from Chase provides an update on a number of different terms for business card holders, but the section that’ll perhaps be of most interest relates to what type of transactions will be classed as cash-like transactions. Here’s what Chase has advised:

Cash-like transactions will be treated as cash advances. Cash-like transactions include, but are not limited to, the following transactions to the extent they are accepted:

  • purchasing travelers checks, foreign currency, money orders, wire transfers, cryptocurrency, other similar digital or virtual currency and other similar transactions;
  • purchasing lottery tickets, casino gaming chips, race track wagers, and similar offline and online betting transactions;
  • person-to-person money transfers and account-funding transactions that transfer currency; and
  • making a payment using a third party service including bill payment transactions not made directly with the merchant or their service provider.

Knowing what kind of purchases will count as cash-like transactions is important for a couple of reasons. The first is that you’ll incur cash advance fees (those can vary depending on what card you have) and the second is that cash advances don’t earn points, rendering it quite literally pointless to use your card for that kind of transaction.

The 64,000 dollar point question is what specific transactions will be affected? While some transactions are explicitly excluded, others either aren’t mentioned or are up for interpretation. Here are some types of purchases you might be concerned about and whether they might or might not be affected.

Simon Mall Visa Gift Cards

Buying $1,000 Visa gift cards is less appealing for many people nowadays due to issues with liquidating them. However, they can still be useful for some people, so will this Chase change affect them?

Based on the updated terms listed above, it doesn’t appear that large purchases from Simon Mall will be affected as none of the terms seem to refer to gift card purchases of that kind. That’s not to say they definitely won’t be affected, but there doesn’t appear to be immediate cause for concern.

Other Gift Cards

Similar to Simon Mall, gift card purchases from grocery stores, Raise, PayPal Digital Gifts, etc. shouldn’t be affected.

Bitcoin

Cryptocurrency purchases are explicitly mentioned in the updated terms, so there’s a very good chance that any kind of Bitcoin and/or other crypto purchases will incur cash advance fees, other than perhaps an occasional loophole which Chase hasn’t identified.

Plastiq

Plastiq transactions are one where we’re going to have to wait and see. It’s not looking positive though because the list of excluded transactions includes “making a payment using a third party service including bill payment transactions not made directly with the merchant or their service provider”

That seems to perfectly sum up what Plastiq does, so there’s a good chance that from April 10 Plastiq payments will be regarded as cash-like transactions.

PayPal Key

Whether or not PayPal Key (PPK) transactions will be affected remains to be seen. I suspect that Chase has updated the terms to include PPK transactions as cash-like transactions, but an argument could be made that even though it’s a third party service, you’re still paying the merchant or service provider directly in a similar way to simply using PayPal when checking out online and therefore that it should code as a regular purchase.

With American Express cards no longer being supported by PPK, it wouldn’t be surprising to see Chase wanting in on some of that action (or, more accurately lack of action.)

The safest thing would be to wait for data points after April 10, or test it yourself by making a small PPK purchase to see how it codes after that date.

PayPal

While using PayPal for regular transactions will continue being fine, sending payments to friends and family will likely fall under “person-to-person money transfers”. While that’s poor value due to the fees involved, some people might use that method at the last minute if they’re in danger of not meeting a minimum spend requirement, so that’s something to be aware of.

Seeing as this wording is also being sent out on personal cards rather than only business cards, this could be of particular interest for Freedom and Freedom Flex cardholders seeing as PayPal is sometimes a 5% quarterly category. If that returns in the future, sending P2P payments might not work.

Bank Account Funding

When opening new bank accounts to take advantage of bonuses they’re offering, there’s sometimes a minimum funding requirement. Some banks and credit unions allow you to fund that initial transaction via credit card and they sometimes code as regular purchases.

The “account-funding transactions that transfer currency” wording suggests that in the future, funding a bank account using a Chase business card will incur cash advance fees.

Taxes

There’s a chance that Chase could regard paying taxes as cash-like transactions under the “other similar transactions” part of the first bullet point. I think it’s unlikely that they’d choose to do this, but it’ll be something to keep an eye out for when making tax payments after April 10. I’m sure we’ll see immediate data points if that occurs, so we’ll certainly share that information if it does end up happening.

Final Thoughts

This is a disappointing expansion of purchases which will be regarded as cash-like transactions, with Plastiq and PayPal Key likely being affected in a few months. To play safe, it would be worth contacting Chase and asking them to reduce your cash advance limit to as low as it’ll go (zero might not be possible with Chase). That way any purchase you make which would fall under these expanded terms should automatically be declined, thereby ensuring you don’t incur fees and miss out on cashback/points/miles.

While several types of transactions are specifically excluded, there are others where it’s not entirely clear if they’ll be affected or not, so it’ll be a case of waiting until April 10 to see how it goes.

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Glenn Lee

Wonder what those PFS/US Mint deals will code as going forward…

Cap

Chase did NOT code as cash advance when I used my Freedom for US Mint purchase on 4/12 (after their 4/10 effective date). It still codes as “Bills and Utilities” and I got my usual 1 UR pt per dollar.

Tim

What is your take on whether coin purchases from the USMint?

Cap

Chase did NOT code as cash advance when I used my Freedom for US Mint purchase on 4/12 (after their 4/10 effective date). It still codes as “Bills and Utilities” and I got my usual 1 UR pt per dollar.

WR2

Anyone reach out to Plastiq for comment yet? I’d imagine they’d be getting a heads up just like with the Amex and PPK issues.

Jeff

So if I accidentally do one of these “cash advance” transactions accidentally, how much will I be in the hook for?

susie q

If taxes are coming to an end I figured I go ahead and chance the Cash like transaction and pay up huge today using the Freedom Unlimited. Hopefully it’s an unnecessary panic, we shall see.

Last edited 1 year ago by susie q
Sean

This has crypto written all over it. Buy some BIT or Eth and watch it shoot up for a month then cash out to cover bill. Chase covering their @ss for when it goes down and people can’t pay it back.

Cap

Email from US Bank about my Cash+ earlier this month:

We think you deserve a reward for paying your taxes.
This year, pay your taxes online with your U.S. Bank Cash+™ Visa Signature® Card instead of writing a check.¹

¹Payment processor fees may apply.

I expect Pay1040, PayUSAtax, and ACI Payments to still be OK based on this Lender’s (US Bank) email solicitation.

I suspect Chase may be eyeing Paypal Key & Venmo P2P transactions…PPK had a nice, but short, ride on Plastiq. I’m gonna miss my $8K US Mint purchases on my CFU’s if this is affected. $8K translated to a nice $180 return from CFU via CSR’s Pay Yourself benefit.

Tons of gray area around Plastiq or using Paypal to buy gold or silver on Ebay?

Lots of Q’s…all spec at this point tho. I’ll be confirming tax payment options later this month. I might even buy US Mint’s American Innovation $1 Coin for $11.50 ($16.45 w/shipping) later this month too.

Wait n see

Bill

do you think buying nba top shot moments will count as a cash advance?

Frank

I tried five different times — over the phone and by secure messages — to get Chase to tell me whether using a credit card to pay federal income taxes through one of the IRS-approved vendors would trigger the new “cash-like transaction” restriction, and I never got a straight answer. They repeatedly said it depends on how the merchant classifies the transaction, and Chase wouldn’t tell me how those three specific merchant transactions are currently classified. So it will go on an Amex card until someone else is the DP guinea pig.

Kathy

Called Chase today. I have paid my property taxes through the approved vendor. Chase told me the same thing:”it depends on how the merchant classifies the transaction”. Chase was able to tell me that the previous property tax payments were reported as a credit transaction. However, to me (a worry wart) that doesn’t mean the upcoming payment I need to make will be reported as credit and not cash advance. I cannot wait for the real stories to come out. I’m awaiting an email response from the property taxes approved vendor. I asked them point blank will they report transaction as credit or cash advance. Good luck to me :-/

Kathy

So the vendor says they will report as a credit card transaction…we shall see…we shall see…

Rick

This new Chase policy begs the question whether other bank cards (besides Anex) have the “cash-like” language in their T&C. US Bank Radisson Rewards cards for example?

Matthew

One of my Chase cards has a change of terms effective April 4 actually. I hope this doesn’t mean the end of Visa gift cards, but I already did a Simon purchase for working on my Hyatt free night.

Raghu Narayanan

Buying usmint coins from usmint, will that be considered as cash advance by chase

Raghu Narayanan

Thanks Stephen. So Chase is okay till April 10, Amex is out. What about CitiBank AA cards, is it okay to use them for the mint deals
Thanks
Raghu

Cap

I always use Citi DB Cash, just recently did again few weeks ago – no cash advance ever.

Cap

Chase did NOT code as cash advance when I used my Freedom for US Mint purchase on 4/12 (after their 4/10 effective date). It still codes as “Bills and Utilities” and I got my usual 1 UR pt per dollar.

Frank

For one who maxes the amount of payments via debit/credit made to the IRS each quarter, debit usually around $1K and credit maybe $8K+ each transaction, who wants to be the first to try a credit card after 4/4/21? I don’t like to “waste” a slot for a small credit card payment just to see. Also, it seems all new card applications have that language in them already so if you get, say, the Business Preferred or Unlimited now intending to make the $7.5K to $15K spend for the bonus by paying the IRS you could come up quite short if it is charged as a cash advance.

Mary S

Would Arcadia be considered a third party bill payer. I use them to pay my utility bills.

DSK

Just got the flyers today for all my Chase cards, and called the Chase executive line. They are gunning for any Paypal charge coming through as debit. That to me means they are absolutely aiming to kill Paypal Key linked to Chase credit cards. Executive line thought all Paypal charges were now coming through as debit, but not sure she understood the difference between Paypal and Paypal Key.

havai

Ok, pardon my ignorance, but just what is the difference between paypal and paypal key? And why would I want to try “Key”?

Last edited 1 year ago by havai
DSK

PayPal Key generated a code that looked to a merchant like a Mastercard debit card and could be linked in your PayPal account to any credit card. So, even if the merchant didn’t accept AMEX, you could give your PayPal Key number and pay with an AMEX. That died early January. You could reduce or eliminate fees on web sites that charged more for credit cards than debit cards, like paying your taxes (that has pretty much gone away on the tax payment sites). You could use your PayPal Key number on recurring charges and change the credit card to whatever you wanted to maximize points. PayPal Key was great but apparently it is starting to become useless, particulary with the latest Chase action. It was too good to last. Dof C has hundreds of data points in comments to his posts on PayPal Key. Hope that helps!

Biggie F

“making a payment using a third party service including bill payment transactions not made directly with the merchant or their service provider”

This is the one that gives me the willies…. People have already discussed IRS tax payments… I also use Chase cards to pay local property taxes, water bills, and gas and electric, where there are small fees. Hard to tell sometimes whether these are third party service or not; one is always starting out through the merchant website.

Does Chase want us to use these cards or not?

Charlie Lee

If my utility company tells me to pay with XYZ company , I consider them their service provider. They must be contracted because who else would process my card for $2-$3?

I see your point however.

Abby

How does one set a cash advance limit with Chase cards? Thanks

John

I used there secure message to make sure the business Ink was set as low as it could be, and they responded yes.

Carl Pietrantonio

Gotta say I am curious to know what the currently unknown details are gonna be. I will predict much weeping and gnashing of teeth come mid-April!

Sue

I tried to use PPK with a Chase Biz card a few days ago for 2 transactions and it was declined.

Joseph N.

I don’t get it. When I fund my Paypal account, how does Chase know if that money is then going on to Paypal Key, or Ebay, or a person, or anywhere else?

mjonis

With PayPal Key, Chase knows because on the payment (at least on my statements) it indicate it’s PayPal for say, Verizon.

MICHAel

what about Venmo or Cash App to pay someone for services?

Last edited 1 year ago by MICHAel
Linda K T

would paying taxes using PayUSA or other vendors also be included?

HawkE

A state income tax payment I made to PayMNtax did not using Amex, not chase did not code as cash advance, but it cleared a few days ago and my progress towards Hilton free night has not budged. Just another data point

HawkE

Update: it posted like 4 days after it cleared.

Steve K

Do anyone have any answer if Paying Local Taxes, Federal and State using CHASE, would be considered Cash-like?