Strategies for Liquidating Credit Cards and Transforming into Business Cash

A detailed roadmap for converting $10,000 in credit cards with 0% APR interest into cash for your business, with the potential for ongoing utilization as you consistently manage debt repayment.

Why even liquidate in the first place?

The rationale for Liquidation:

When embarking on a business venture or venturing into real estate investment, the most straightforward route to fund development expenses is through an unsecured loan. The primary challenge, though, lies in the difficulty of obtaining such loans unless you have a well-established and highly profitable business.

Despite not being openly promoted by credit companies, Zero APR cards offer a straightforward avenue for swiftly securing a business loan that can be repaid over time without incurring interest.

DISCLAIMER:

Prior to engaging in any credit card liquidation, it is imperative to seek advice from a certified accountant and an attorney to ascertain whether any of these methods may contravene local laws or your credit card terms and conditions.

It's essential to acknowledge that, depending on the chosen option, there may be challenges to navigate when attempting to convert credit into cash.

1. To avoid incurring interest on cash advances, you must elevate your credit score sufficiently to qualify for a 0% APR credit card offer.

2. If you opt for a balance refund check, ensure that your credit card company is willing to issue one rather than merely reversing your overpayment.

3. For a convenience check loan, the initial requirement is to possess a credit card, followed by waiting for an online promotion or a mailed offer.

4. When aiming to convert check payments into cash, it is necessary to have a willing recipient who accepts payments via check, such as a landlord.

Any borrowed funds, such as those from a 0% APR credit card, must be repaid before the expiration of the interest-free period.

Credit Card Liquidation Strategy

Opting for a conventional cash advance from your credit card often incurs immediate and exorbitant interest rates, ranging from 20-30%!

However, a savvy approach involves promptly settling this amount through a 0% APR balance transfer, minimizing your expenses to the cash advance fee and a few days' worth of interest.

Outlined below is a three-step plan elucidating precisely how to secure an unsecured 0% APR loan while mitigating the expenses linked to cash advance fees.

Step 1: Securing a High Cash Advance Limit Card

Obtain a credit card with the highest possible cash advance limit and the lowest associated fees.

Here are my top 3 high cash advance limit cards so far this year.

1. Bank of America Cash Advance Limit: 30% of Credit Limit

Uses the term “Bank Cash Advances” to refer to advances via an ATM, over the counter, same-day online, and an overdraft protection cash advance feature. The total amount of cash available for cash advances is equal to the cash limit currently assigned to you on your credit card. The cash credit limit is 30% of your total credit limit.

We’ve identified the Bank of America® Customized Cash Rewards credit card as having a credit limit as high as $95,000, although the average credit limit is certainly much lower. Presumably, the cash credit limit for this lucky cardholder would be 30% of $95,000, or $28,500.

2. American Express Cash Advance Limit: $10,000

American express offers a sizable number of both credit cards and charge cards. The former lets you stretch payments over multiple months whereas the latter requires full payment by the next due date (unless you sign up for an Amex program that allows you to stretch your repayments).

We found a maximum cash advance limit of $10,000 on the American Express Centurion® Card (which can only be applied for by invitation), followed by $8,000 on the The Platinum Card®, $6,000 on the American Express® Gold Card, and $3,000 on the American Express® Green Card. There may also be a limit on the number of times and the cash amounts you can withdraw money from ATMs in a given time period.

American Express offers you two ways to withdraw cash from an ATM (or from a teller).

The first method, which Amex calls Cash Advance, is a true cash advance feature that lets you borrow against the card’s credit line (minus your existing balance). Alternatively, you can use the card’s Express Cash feature to access cash from a linked financial institution account (such as a checking account), similar to how a debit card works.

A 5% transaction fee applies for an ATM cash advance, plus any fee charged by the ATM operator, with a minimum charge of $10. You’ll need to obtain a four-digit PIN from Amex to use your credit card as an ATM card. Interest charges accrue starting on the transaction date — there is no grace period.

The second route, is it’s venmo feature. At most $3,000 per card from my experience.

3. Capital One Cash Advance Limit: 30% to 50% of Credit Limit

Capital One

credit cards set cash advance limits at 30% to 50% of the total credit limit, depending on your creditworthiness. The cash advance fee is either $10 or 3% of the amount of each cash advance, whichever is greater. A daily ATM withdrawal limit of $600 on ATM cash withdrawal transactions applies to ATM cash advances.

In terms of the highest available credit line from a Capital One card, we came across one reviewer who reported an initial $50,000 credit limit from the Capital One Venture Rewards Credit Card, implying a cash advance limit up to $25,000.

However, the average credit limit for this card is in the range of $5,000 to $10,000.

Once you identify the most suitable card within your eligibility, seek out three or four additional cards that offer 0% balance transfer options for a minimum of 12 months. Numerous credit card companies extend such offers, easily accessible online through a Google search for low APR credit card promotions.

Acquiring a 0% APR Card

Step two – After enrolling in the initial card, subsequent lenders are likely to offer you another credit card with a more favorable interest rate, eventually leading to the acquisition of a 0% APR card for balance transfers.

8 Excellent Small Business Credit Cards 0% Interest of 2023

Personal 0% Credit Cards

Step three - Withdraw and Transfer

Utilize your high cash advance card to withdraw a substantial amount, maximizing the cash advance limit. Immediately transfer the advanced cash balance to one or more of your 0% APR cards.

Interest-Free Cash Loan

You now possess a 0% APR loan that can be efficiently repaid through manageable installments over an entire calendar year.

This process leaves the first card with a zero balance, although an initial fee for the cash advance may have been incurred, contingent on the card terms.

The initial cost of your cash loan is minimized within the industry. This money can be invested in your business, with the advantage of repayment at an interest-free rate through low-minimum payments for the entire year.

Having completed this strategy, your improved credit standing positions you to access additional credit, should the need arise. The first credit card now stands with a zero balance, enabling future borrowing whenever it aligns with your financial capacity.

Refunding through Balance Transfer

Another avenue for acquiring instant cashback involves leveraging a credit card with a low existing balance. Suppose you receive an offer for a 0% balance transfer on one of your cards. In such a scenario, you can maximize this opportunity by transferring the permitted maximum amount at the 0% interest rate onto cards with low balances.

Executing a Low Balance Transfer

If, for instance, the current balance on your card is $300, you can request a transfer of $3,000 onto it. Following the completion of the balance transfer payment, this card will then carry a negative balance of $2,700.

Obtaining an Overpayment Refund Check

Subsequently, contact your credit card company and request the issuance of a refund check for the overpayment. This refund check can be deposited directly into your bank account, allowing you to withdraw it as cash.

Securing a Cash Loan through Balance Transfer

This method provides an alternative means of obtaining a $3,000 cash loan at a 0% APR. Alternatively, you can utilize the negative balance to settle bills that accept credit card payments. This expenditure will still incur a 0% interest rate, given that no additional charges are applied.

It's crucial to note that this strategy is applicable only to existing credit cards with an existing balance. Attempting balance transfers on cards with zero balances is ineffective, as banks do not accept transfers onto credit cards with no existing balance. To make this approach effective, it is necessary to maintain a minimal balance on the card in question.

Convenience Check Loans

Transforming credit card convenience checks into cash comes with minimal fees. Typically included with a credit card statement, these checks can be written out to anyone.

When you issue such a check, you will incur the same interest rates and fees as a credit card cash advance. If you write the check to yourself and deposit it into the bank, it functions similarly to a cash advance.

To initiate the use of convenience checks, the bank must first send you a special offer, and you should be vigilant in watching for such offers. For instance, you might receive a mail offer containing convenience checks with a 0% APR for the next 12 months, essentially providing a year to repay the amount as if it were a 0% loan.

Converting Check Payments to Cash

Online platforms like LandlordStation, Plastiq, RentMoola, and Venmo accept credit card payments and then issue checks on your behalf. You can split the total payment across multiple credit cards as needed.

This flexibility underscores the importance of having at least three or four credit cards at your disposal, as emphasized in the cash advance strategy.

This process is especially applicable when paying rent with a credit card while remitting payment to the landlord via check. Alternatively, you can borrow money from friends or family and repay them through a check.

Imagine having your rent charged to your credit card like a purchase, the landlord receiving the customary check, and you not having to debit a single dime from your bank account.

However, bear in mind that these check-sending companies typically charge 1.5% to 2.5% on each transaction. When utilizing your 0% APR credit card for payment, this remains one of the lowest interest rates available. If your credit card also accrues Airmiles or travel points, it adds an extra advantage.

Rent Sharing in Cash

If you share rent with roommates or business partners, consider charging the entire rent to your credit card. By using one of the mentioned services, you can send the landlord a check while your roommates or business partners reimburse their share in cash.

In Summary

The transformation of credit cards into cash can be executed through various avenues, including 0% APR cards, advantageous balance transfers, and refunds from balance transfers. Additionally, the option of converting check payments into cash opens up possibilities for paying rent or mortgage using this method.

Opting for 0% APR offers ensures no interest accrual on your loan, and you can manage straightforward monthly payments toward your principal balance. This form of unsecured credit eliminates the need to use your assets as collateral and involves minimal credit checks.

The process can be repeated continuously to obtain swift cash by canceling 0% APR cards once their offers expire and applying for new ones.