ULPT: Can’t pay your credit card bill for the month? Book a hotel and cancel it
Posted by Jsalz@reddit | UnethicalLifeProTips | View on Reddit | 174 comments
Ok so I’m not sure if this only works on Chase credit cards because that’s the only one I’ve tried. But I’ve noticed that if you book a hotel and pay for it (booking.com, Agoda, or Airbnb) then cancel, the refund pays for the current credit statement. So if I owed $2000 for the month of January, I could book a hotel for $2000 (make sure it has free cancellation) pay for it and then later cancel it. The refund would pay off my credit statement for January and now I wouldn’t have to pay this $2000 until the next statement the following month.
I do this sometimes when I want to earn some extra interest on the cash instead of paying my credit card statement. It’s super easy and you can book a stay as little or long as you want to get it to the right dollar amount. Again just make sure it has free cancellation!
smelting0427@reddit
In general I thought hotels don’t properly charge your card until you stay/check out? They may put a hold for x amount but assume only that would get released when you cancelled, and that this wouldn’t show as a refund per se.
Jsalz@reddit (OP)
Booking.com you can always pay upfront when booking through them.
Absolutelybannannas@reddit
Been trying the 3 sites you recommended. None is letting me pay now. Do you have any new information?
Real_Ad_8287@reddit
Works can confirm in the Uk too. BA First class flights is my go to Hope this helps someone
schaudhery@reddit
This works with PayPal too. You can PayPal your friend $1000 (or any amount) and choose to use your credit card as the form of payment. Wait a couple days and have the friend hit the Refund option and it’ll refund you all the money.
o0Jahzara0o@reddit
Tried but looks like paypal wanted to charge a fee. Entered in $2000 and the fee was like $58. And I doubt you would get that refunded. Interest is probably going to be lower that the fee.
serickson80@reddit
This is how many scams are actually done, so probably shouldn’t do this. Scammer sends you $2000 “accidentally”, asks you to return it. You do. You think you’re good. Then the bank rejects the initial deposit and takes it back from you. So now you’re out $4000.
PMmeyourlogininfo@reddit
You're only out $2000 though because you only ever sent $2000, right?
NekoHimeko@reddit
Better really trust that friend lol
send_me_a_naked_pic@reddit
You can also do this with a family member
New-Huckleberry-6979@reddit
Better really trust that family member lol
TheCzarina2020@reddit
Can you use PayPal to send yourself money on a different app? Like to venmo or something, I don't have anyone I trust enough to send that kind of money.
MarkRems@reddit
Better really trust yourself lol
Diqt@reddit
I’m so confused
MeghanGharib@reddit
This is genius!
NotAnyOneYouKnow2019@reddit
I guarantee you are paying more in credit card interest than you are receiving on your “cash”.
rmg20@reddit
The trick is that since they’re paying the statement balance, they aren’t getting charged interest.
NotAnyOneYouKnow2019@reddit
If they are paying the balance, what’s the point?
serickson80@reddit
It’s paying the balance with the refund of the cancelled hotel. The refund is applied towards your payment. It’s effectively pushing what you owe out a month with no additional interest charge. Net zero. No money leaves your bank account.
Jsalz@reddit (OP)
I guarantee you have no idea what you’re talking about and don’t know how to read. This method pays your balance for the month and incurs no interest.
Fastbac@reddit
I have just noticed this a few days ago after I booked and canceled a room. Sort of messed me up because the amount we expected to get paid out of our account did not, and so I just did an extra payment in the amount of the cancelled room before the current statement closed.
rosickness12@reddit
Confused on the book a room for $2k part. Where can you pick the price to pay and do so for $2k? Are you booking penthouse suite or something?
Jsalz@reddit (OP)
Just adjust the dates as long or as short as you need to come to the dollar amount you are looking for. If you need 2000 and it’s 100 a night book a 20 night stay with free cancellation.
TeacherMo2007@reddit
I’ve done this with $$$ boots from Zappos. Never wore (or even tried on) the boots but knew 3 pairs of Frye boots would knock out my statement balance. Still have to run the return to UPS, but it helped when I needed it at the time.
feckineejit@reddit
Problem is that now we are talking about it, the CC companies will figure out how to stop it.
Intelligent-Coconut8@reddit
I don't think they really care because in the end, they're still getting their money, all OP is saying is this just delays when your real spending is due. I'm sure you could get away with it for awhile but all it does is move the debt obligation to the next billing cycle
Olivia512@reddit
They absolutely do care.
They can't charge you interest and late fees when you do this.
They are essentially giving you a permanent interest free loan.
Speciou5@reddit
Most hotel bookings I've encountered that let you refund gives it to you in $ that has to be spent in that hotel brand anyways.
Buck_Slamchest@reddit
> pay for it and then later cancel it
So how much do you pay for this room before cancelling ?
Jsalz@reddit (OP)
However much you want. Just find a hotel with free cancellation and change the dates for as long or as short as you need to get the dollar amount you’re looking for.
short_bus_genius@reddit
But then I have a have a $2000 charge on my credit card for next month, and I already banked the refund last month.
GottaUseEmAll@reddit
Exactly, you're giving yourself extra time interest free, not magically eliminating the debt.
linearphaze@reddit
Exactly, your simply floating the debt, you don't accrue any extra debt
thenate108@reddit
Precisely, you are merely delaying the date of payment, not erasing the debt itself.
RevolutionaryBee-@reddit
Indeed, you are effectively deferring the deadline for payment without absolving the underlying debt itself
WilliamBott@reddit
Correct, you are only putting off fulfillment of your financial obligations until a future date while your requirement to repay remains intact.
Olivia512@reddit
Exactly, it's essentially like a free cash advance.
WilliamBott@reddit
I get free cash advances on my cards sometimes. I just offer to pay when out with friends and have them give me cash, or if family is going to the store I have them use my card and give me cash or write me a check.
hysilvinia@reddit
You're just giving yourself an extra payment cycle without accruing interest.
Buck_Slamchest@reddit
So you find a room in a hotel with free cancellation and you book a stay that's equivalent to the value of the amount you need, so in your case $2k.
So you pay the $2k then cancel for free to get the refund. Or am i misunderstanding that ?
Jsalz@reddit (OP)
Yes exactly. Check my edited post for further clarification. Just have to make sure this is done after the previous statement is closed. The refund will post on your previous statement and the hotel charge will be posted on your next statement (thus delaying the charge one month.
TheCzarina2020@reddit
So this will only work if you have available credit equivalent or more than the balance, right?
pyroSeven@reddit
Could you, hypothetically, keep doing this once a month and have it go for years until you eventually die and the bank writes it off?
Jsalz@reddit (OP)
Hypothetically yes, but in reality I think your credit card would get blocked by the booking companies if you abuse this. Booking.com would likely stop letting you use the card or not let you book hotels with free cancellation. I’m sure people have attempted this before.
pyroSeven@reddit
Just to add on, hypothetically, couldn’t you just report a lost card and get a new credit card with a new number? Creating a new booking.com account is easy enough. It’s a lot of hassle but just something to ponder.
robhen5@reddit
Your name and address will still be on file
pyroSeven@reddit
I'm poking around and it seems like booking.com only charges for the first night and not for the entire stay. What do I look for to do this?
Jsalz@reddit (OP)
I’ve been traveling for a couple months (Japan) and Booking.com had always allowed me to pay for the entire stay during checkout. It’s never actually allowed me to only pay for one night at first.
pyroSeven@reddit
Ok I clicked on next and pay in full to see it all. I’m gonna try with a small amount to see if it works for my bank.
Pumpoozle@reddit
What is “it”? The booking or the canceling or both?
Jsalz@reddit (OP)
Do you mean the “It” in my post title? If so I mean the booking, canceling the booking you’ve already paid for will automatically post a refund to the credit card you used to pay.
Pumpoozle@reddit
Don’t they usually just “reserve” the room, and charge your card once the “cancel by” date has passed?
Jsalz@reddit (OP)
You can always choose to pay early when booking. I always pay when I make the booking regardless if I need to or not.
nikhil48@reddit
I think I remember doing this accidentally once. I am curious about the timing of it all though.
Let's say I have to pay $2000 on a statement that closed on 20th of the month, that I have to pay by 30th of the month (on which day I have my recurring set up).
So what is the timing to do this? I should book the hotel with free cancellation by paying $2000 on the 21st? And I cancel it within 24 hours on the 22nd and hope the refund posts before the 30th. Correct?
Amos_Dad@reddit
One thing I've done if I'm short on cash is I'll pay my credit card payment and then just use it to pay for whatever I was gonna pay for anyway. It doesn't get me ahead but it keeps me current. Like if I need gas I'll use the card for gas and then pay that much to my card. It counts as the payment still and buys me time.
xjrh8@reddit
This has definitely worked for me in the past several times. Thought about posting it here, but didn’t want to draw attention to it in case the loophole gets closed.
ScubaLooser@reddit
In theory if you had a balance you could go book a hotel for that same amount and cancel the hotel booking. The credit will pay you balance and carry the”new balance” of hotel to the following month. You can potentially skirt interest fees this way.
Swang007@reddit
Not sure why people are doubting you OP. I discovered this by accident once when I had to make a temporary large holding charge that was later refunded. No interest, no fees, but my statement balance for that month was paid.
As long as the credit card company doesn’t catch on, this is a true ULPT!
QuickBASIC@reddit
Absolutely agree. I was a Chase Bank CSR for 6 years. By law statement credits are required to be applied to already posted statement balances.
What this means is that if the credit is more than your previous statement balance, it eliminates the minimum payment due, because the balance of that statement is now $0.
The biggest caveat is not the original charge has to first fully post, and then be refunded. If it's still a pending transaction they'll just cancel the authorization and no credit will be issued towards the statement balance.
Swang007@reddit
Yes, that’s an important detail! Has to post & credit back to you, not be pending and then cancelled.
Jsalz@reddit (OP)
I think I may have worded it poorly and some people may have misinterpreted to think I meant this would erase the debt completely as opposed to delaying the debt. But yes it definitely works, I’ve been traveling for a few months and frequently canceling/rebooking hotels I already paid for and it keeps reducing my previous months statement.
donjohnmontana@reddit
So to throw my two cents in, sure this let’s you postpone a payment, but you are still paying interest on the balance. And I imagine you are also paying interest on the amount you charged to the hotel before canceling.
Credit card companies make money on interest earned on your card balance. So of course they are happy to let that carry for a month. That increases their bottom line.
The credit card company wants you to carry a balance and rack up interest charges.
But this could get you past a funding short fall if needed. So there’s that.
eggplantlizarddinner@reddit
I don't know about Chase but some of my credit cards will also reverse the interest on a refunded charge.
SoSavv@reddit
You're misundestanding the method.
If the amount of the hotel credit is equal to the amount of previous debt on the account, there wouldn't be any interest charged as long as the refund comes in before the payment due date. A refund is applied to the overall account, not a specific charge.
The new hotel charge also wouldn't have interest as long as you are now able to pay it off the next payment due date. Now if you still can't pay off that same balance, sure it'll have interest but now its only one month and not two.
thatguy425@reddit
So if timed right could you delay a debt indefinitely?
Jsalz@reddit (OP)
Theoretically yes, but in all likelihood either the booking company or the credit card company would eventually catch on and shut your account down if you’re abusing this.
ihaveasmall@reddit
Chase knows about this bug in their system. This accidentally happened to me, except I was upset and called to make sure I wasn't charged any extra late fees when they didn't take my autopayment. It's a known bug
QuickBASIC@reddit
It's not a bug in their system. I used to be a Chase Bank CSR. Statement credits are required by law to be applied to posted statement balances, so this means if a credit is for more than your statement balance that statement's balance is $0 and therefore the minimum is 0$.
Swang007@reddit
Me too! Chase card. Automatic payment didn’t go through and I called in a panic.
shingonzo@reddit
This might work with ordering groceries as well. I’m not 100% sure but I believe that’s the case
osiris0812@reddit
This absolutely works…I’ve done with AMEX before a few times when times were tough
LAURF_N@reddit
I was doing this for years. It works. No one ever said anything to me. I didn’t book hotels I just ordered items online for click and collect and then cancelled the item the next day in my orders. The refund then pays off my minimum payment for the month.
3141592652@reddit
Can’t pay for it if I hit my max already
hobopwnzor@reddit
Does it for Amazon refunds too.
Cajum@reddit
This seems like something that could really save someone's ass or help someone dig themselves in a much deeper hole lol
Subject-Economics-46@reddit
Option 2 99% of the time
doorsfan83@reddit
If I'm getting this correctly you could theoretically use half of your total credit limit on every card and never pay 1¢. You could just do this every month and never pay.
GyatAttack@reddit
Doesn't work - at least where I am from. Even after getting money refunded I still 'owed' the CC company. I had a negative credit card balance ( they owed me money) for a bit
Leading_Kale_81@reddit
So, if you do this, the credit card company will think you paid off your statement balance and you will not be charged interest on it even though you are carrying it past the due date. Is that correct? If so, this is a pretty amazing hack.
Jceggbert5@reddit
Basically, any credit on the account counts as a payment.
QuickBASIC@reddit
This is not correct. Credits are required by law to be applied to posted statement balances first. What this means is that credits apply towards the balance of that statement. This this means that if a credit does not eliminate the statement balance, you may still have a payment due.
Jceggbert5@reddit
I didn't say a complete payment or a payoff, but still counts as a payment.
It would make sense that if you spend $100 then get a $100 refund, it just cancels it out, but it actually treats it like you paid $100 instead
QuickBASIC@reddit
It literally doesn't count as a payment. Regulatory compliance regarding specific language used when communicating about credit and debt means that there is a distinction between a "payment" and a "statement credit".
You can call it whatever you want, but employees of banks have to use a very strictly specific language when speaking to you about it and you calling it the wrong thing will create confusion.
The reason it's not a payment is because it is applied to the previous statement balance not to the minimum payment due, it reduces the statement balance the same way a payment does, but isn't a payment.
Consider the scenario where your minimum payment calculation is 1% of the statement balance or $25 whichever is greater.
If you have a $100 statement balance and you receive a $5 statement credit, your new statement balance is $95, and the minimum payment is still $25, unlike a $5 payment which would reduce the minimum payment due by $5 to $20. In this scenario, a statement credit is very different than a payment.
The reason a statement credit may reduce your minimum payment due to $0 is if the statement credit is more than the statement balance making it $0, which has a $0 minimum.
That's why is important you use correct language when communicating about credit.
OkeyDokey654@reddit
Right. It doesn’t have to be a hotel. You can buy anything that costs as much as your minimum payment and then return it.
pyroSeven@reddit
I think hotels are easier cause there’s nothing tangible to return and can all be done on a device.
Timely_Ad9738@reddit
No you will still be charged interest. This person doing it so they "can collect interest on the cash" is just an idiot if using it for that reason
Jsalz@reddit (OP)
No you don't charged any interest.... This pays off your previous statement so you have a 0 balance for the previous statement and thus no interest accrues. Ive done this many times. Maybe know what you're talking about before making stupid statements yeah?
cat_police_officer@reddit
That’s how I understood it as well. I don’t know how many times you can do it before someone notices it, but I guess it’s ok for using it in emergency situations. 😌
ShitPostsRuinReddit@reddit
Look at the statement of any chronic Amazon buyer/returner.
sloptopfish@reddit
Do you get to keep the points you accrue when booking the hotel?
meowbird@reddit
no
Bobheagen@reddit
It’s also a great way to extend the interest free financing period at Best Buy
GoauldofWar@reddit
So if you owe 2000 bucks for january, and then pay 2000 for a hotel room, there is now 4000 dollars on your card. So when the refund hits, you are back down to 2000.
Jsalz@reddit (OP)
You have to wait until the January statement closes. My January statement is 2000 and is due February 28th. I get a hotel and cancel it sometime in February. The refund is posted for my January statement which I no longer owe on February 28th. It’ll be owed in the next statement on March 31st.
GoauldofWar@reddit
So, you're just kicking her can down the road. You'll never pay the card off. You'll always be carrying a balance.
This doesn't solve anything.
Clever_BigMack@reddit
you dont collect interest for the original $2000 for that month. Kicking the can down the road saves you about $45
GoauldofWar@reddit
And you still have to pay the 2000 eventually. Like, yeah you save 50 bucks, but you still have that balance and if you slip up even once with this truck, you are boned.
Just pay your shit off.
Majorminus55@reddit
No way youre this dense? u/GoauldofWar
Kaoryn@reddit
The point of the post was to delay the required payment until next cycle so you can pay it off. It's not to erase or negate the debt forever by continously kicking the can. Just a few extra weeks to collect your ducks.
prodigalkal7@reddit
Don't understand why that person is being overly and incredibly dense. Paying off 2000 is easier than paying off 2045... Or paying off 2090... Etc.
Putting off interest on an amount you owe is always favorable.
Speciou5@reddit
That was the entire point of the ULPT. It's kicking the can, not inventing free money.
depressedhomosexuaI@reddit
it's not abt erasing the debt, it's about moving it to the next month
if u don't pay ur 20$ debt in January, you may need to pay 22$ bc of interest
but if you book a hotel for 20$ and cancel it, you have paid your january debt and created a new 20$ debt for february, giving you an extra month without needing to pay for interest
(i'm not an adult and idk how much % interest is but like, i understood it like that)
aetheos@reddit
You're gonna go far, kid.
CorporalPunishment23@reddit
Right, but what OP is saying is, now the "payment due" obligation has been satisfied because the system interprets the cancellation credit amount as a payment.
If so, it's an effective way to stave off late fees. Of course, it's a temporary band-aid and the real long-term solution is to get the credit card and the budget roped iin. Which can be easier said than done.
alexj5566@reddit
Or hear me out...don't buy stuff you can't afford.
Jsalz@reddit (OP)
Where’s the fun and unethicalness in that!
alexj5566@reddit
Degen
theepi_pillodu@reddit
Your Cashback would be refunded/removed too when the refund hits the bank.
Jsalz@reddit (OP)
This is true, but then you get cashback the following month
Spader623@reddit
Also, cashback (for me at least) isnt 'terribly' high. I got a refund on a big purchase, about 1.3K or so (well two smaller ones that totaled that). Cashback went from like, $3 -> -18...
But also, who cares? So I 'lost' $18. Ok? I 'gained' 1.3K so i'd say all in all, I came out ahead
Dimatrix@reddit
You’re on the wrong subreddit
alexj5566@reddit
No I'm not. It''s unethical life pro tips. Not degenerate life pro tips.
Dimatrix@reddit
So what about your advice is unethical? People don’t come here for the “right” solution, they come here after they have established that is not what they are doing
Sacred_Charge@reddit
damn your income must be substantial and predictable
alexj5566@reddit
If you need to use credit cards for life essentials, get off of Reddit and change that.
ruffsnap@reddit
Very privileged thing to say, honestly.
With how little most people make, credit card debt is just a given if they want to pay for the bare minimum groceries and roof over their head.
Everything is expensive as fuck now. Debt is unavoidable.
Speciou5@reddit
Going into credit card debt is actually a very American thing. Practically the only country that does it.
But I agree with others this is the wrong sub to claim moral high ground.
rdldr1@reddit
Capitalism called and wants you to pipe down.
Cardchucker@reddit
This ain't the be responsible and follow the rules sub!
SaintAtlanta@reddit
Set up 2 paypal accounts.
Send account A $100 each month Send account B $100 each month
There will be interest accrued, but you wont need to actually make payments on the accounts.
ShrimpSherbet@reddit
Big if true ngl
JamiePulledMeUp@reddit
Is this an American thing, might not work in Canada. It goes by total balance.
Like you can pay 2000 dollars but if your balance 2001 you're still getting charged interest
mgahan@reddit
isn’t that exactly what OP is saying? if the credit from cancelling is as much or more than the statement balance, no interest will be charged?
ShrimpSherbet@reddit
What is that?
JamiePulledMeUp@reddit
What is what, lol
ShrimpSherbet@reddit
Canada
notislant@reddit
Interest on $1?
SufficientBird1718@reddit
It would be easier o start a business, see credit card payment, run 2200 on your processor and use that to pay your bill.
Subject to credit limits.
jackie099@reddit
Don't do it with chase. That's a good way to get banned from them
kuken_i_fittan@reddit
Interesting. None of my hotels have charged me until I get there though.
No hold on the card or anything. They just hold the room, then charge me a $50 hold and then actually CHARGE me once I check out.
Secondary123098@reddit
You should also know that no credit card I’ve used has an auto payment smart enough to pay the account minimum when this happens. If you happen to do this three periods in a row, your card will be canceled. (Mine warned me via email after two. The start of the pandemic was a weird time.)
So, if you do this, also send in the $25 or whatever to keep their rules happy so you don’t lose your card.
Wallstar95@reddit
Can't you just do this forever then lol
funlol3@reddit
Yeah until they fix the loophole in a few years and you are stuck with a 250k balance that you have to pay off in one mont
Wallstar95@reddit
that's only if youre spending more than you can pay.
notneps@reddit
Picking up pennies in front of a steamroller.
Jathinreddy09@reddit
Can anyone confirm if this works on amex?
hb94@reddit
Airfare typically comes with a 24h cancelation policy, would this work?
VMojitoBabe@reddit
Maybe but if you will frequently using this option your account will be monitored by the bank and as a result, they may block your account or even closed it.
dj_boy-Wonder@reddit
Hm… if I purchased like this on a card that earns points and then cancel… do I lose my points?
Jesus_Hates_Memes@reddit
Now this is a real ULPT love it
CoffeeNo849@reddit
I'm a bit loss here... So if my statement for the month is 2000$, and the hotel reservation cost X amount of $, wouldn't the refund just cancel out the X $??
boristeran@reddit
This one is so good
Ooooohhhhhho@reddit
Just pay your cc in full and then use your cc to top up your revolut or wise and then your interest should be reset
Gtoseli@reddit
It is important to know that if you do this enough times the CC company might flag you as a chargeback gamer, since you gamified the process of cancellation/charging back the company. This might lead to them not doing business with you anymore or refusing disputing fraudulent purchases in the future.
Kiko7210@reddit
can anyone confirm if this works with Discover?
americanemu25@reddit
This also works for Amazon orders. I bought this $1,000 scanner for whatever reason, with the intention of using and returning it. Just need to check and double check return policy.
Part-@reddit
depends on the card issuer. Some treat refunds as payments, and some don't. Dig into the card terms to find out if this is the case for you.
jayXred@reddit
The first time I experienced this was with a Guitar Center card, they often have pretty long term 0% finance deals (like 36-48 months) and I was like half way through paying one. I then bought another guitar but returned it a few days later as it wasn't what I was looking for and when I checked my statement the previous 0% deal was paid off and I was technically paying on the insturment I returned, which also extended my 0% period by like another year or something like that.
bwilliamsiu@reddit
So I work with credit cards and this is true for most cases and isn’t unethical. Credit cards have different options for payments and most consumer ones will count credits as payments so any type of refund credit is counted towards a payment and it’s designed as such. Rarely, there are cards which don’t count credits as payments however and this would not work (but it’s very rare I see this option set). I can assure you the credit card company does not give af and plenty of people do this
Zetavu@reddit
This sounds like a bug in their system that they can follow up on any time. In other words, if they do an account audit and see that you failed to pay off your minimum or total bill but instead used this gimmick, they could manually apply the interest penalty after the fact and you would have no recourse. So yes, you may get away with it, for now, or you may get a bill for penalty and interest, and guess what, that interest accumulates compounded penalties month after month. Play stupid games...
So I am with the other posters that responded, don't buy things you cannot afford.
schaudhery@reddit
My friends and I would PayPal each other and then refund to exploit this same thing. We were broke and worked in retail at the time.
detoxbunny@reddit
Sadly my CC provider is onto this. Refunds/reversals don’t count as deposits. Only actual transfers in.
srahsrah101@reddit
The question then becomes: how many months in a row can you do this?
Craigglesofdoom@reddit
The only drawback to this is you have to gamble the timing. some hotel chains (hilton) only put a preauth on your card that doesn't actually charge anything, until like a week out.
Jsalz@reddit (OP)
You can always pay immediately when booking through Booking.com. The only instance they don’t allow it is if the hotel only accepts payment on the property. But I find those are extremely rare.
KnightFalkon@reddit
Why is your credit card payment $2000 🤮
jbrown517@reddit
If you have 2k to pay for the hotel why wouldn't you just pay the card off?? Or conversely if you can't pay your credit card bill, how are they going to have 2k to pay for the hotel??
CluelessNuggetOfGold@reddit
Damn I could really have taken advantage of this a year or so ago lol. Better late than never though, this is an actually great ULPT
MiikaMorgenstern@reddit
At that point a safer option would be to use it to buy a money order, deposit said money order into your bank account, and then use the account to pay the credit card.
As long as at least the minimum payment goes in it doesn't matter how much comes out, the problem of course is the interest accumulating.
gibberishandnumbers@reddit
You gotta pay cash or debit for money orders now no cc
MiikaMorgenstern@reddit
Last time I did it I had to buy a gift card then use that to buy the money order, it took trying a handful of stores to find one where the register wasn't coded and the cashier wasn't paying attention to let me. It can be done, but it's not easy to do and comes with some risk
SigSeikoSpyderco@reddit
People used to do that all the time for manufactured spending to get bonuses. Largely dead now as the CC companies detect it and you can get shut down (which sucks because you lose all your points and miss out on a lot of opportunities).
MiikaMorgenstern@reddit
The only people I know still getting away with skimming rewards are the ones doing it with accounts that have high amounts of regular use and are pushing small amounts of money between themselves and a significant other who isn't legally connected to them.
Jsalz@reddit (OP)
Not sure I’d consider that option safer and like you said there’s interest. If it says free cancellation on Booking.com you can cancel every time through their website guaranteed. I can book a hotel, pay, and cancel within 10 minutes. The refund on Booking.com takes a few days to come through tho, Agoda is usually instant.
MiikaMorgenstern@reddit
There's interest on a credit card regardless, the problem is that the interest rate is usually markedly higher on cash advances than on purchases codes as regular transactions. In my case it's something like an 8% higher interest rate.
If you have a balance on the card and you don't have a 0% interest rate then you'll be paying interest, that's just a given. There are niche situations where it's worth stalling for time by doing this to pay the minimum but it'll almost never be worth it
Jsalz@reddit (OP)
Hmm not sure I understand. As long as you pay your statement on time there’s no interest on a credit card. This ULPT is just delaying the charge from one statement to the next statement. No interest involved I’ve done this many times
MiikaMorgenstern@reddit
I do apologize, I hadn't had my coffee yet and now I realize that I misread your initial post.
LurkerGhost@reddit
thats called manufactered spending, and that is grounds for account closure.
MiikaMorgenstern@reddit
It's something that you certainly can have your account closed for, but if you're using your account regularly and not doing this in large amounts or on a regular basis it's not particularly likely to raise eyebrows. The real issue comes if you're doing this often enough that someone will notice it and investigate. People who do manufactured spending at high volumes to skim rewards programs are likely to run into this, people who manufacture spending in very small amounts only sporadically to kite the minimum are not likely to get popped for it
saboerseun@reddit
Thanks for sharing the tip!!
yunus89115@reddit
Basically this delays the need to make a payment but accrues interest in doing so. Considering the minimum payment on $2,000 is likely $20-35 and the interest accrued (no grace period when you carry a balance) would be $33 @ 20% this is a lot of juggling to delay paying ~$30 and accruing additional interest on that deferred $30 as well.
Jsalz@reddit (OP)
This method accrues no interest (at least on my Chase credit card). The refund pays off the previous statement, essentially making the payment for you. The hotel charge will be on the next statement now. I’ve done this dozens of times, no interest involved.
yunus89115@reddit
You must be ensuring the entire balance is paid, can’t carryover even a penny balance or the grace period ends on every card I’ve ever had. I guess you found a little trick that works for you and that’s cool but it only defers the payment and each time you’ll need to increase your hotel spend to ensure you cover the balance. It just seems like a lot of risky juggling of numbers to delay payments. If the hotel doesn’t refund within that cycle for example (perhaps they eventually hold refund pending an audit after it occurs too often) the plan will come crashing down.
I knew a guy who found a way to pay his mortgage with a credit card for the points many years ago when that wasn’t really a thing. It wasn’t as simple as he made it sound and one month his plan didn’t work out timing wise and the one month late payment cost more than he earned for nearly a year in gaining points.
mhdy98@reddit
yeah but the money shows up on the credit card, not on the account total. at least in my eur bank