What Happens When You Use Credit Card Cashing for Large Transactions

Almost everyone uses credit cards for regular purchases, but some people turn to credit card cashing when they need immediate cash. While this may seem like a quick fix, using credit card cashing for large transactions can lead to serious financial and legal problems. Understanding how this process works and what risks it carries is essential before considering it.

What Happens When You Use Credit Card Cashing for Large Transactions?

Credit card cashing (신용카드현금화) is a method where a person uses their credit card to make a fake purchase from a merchant in exchange for cash. Instead of buying real products or services, the merchant provides cash equal to a portion of the transaction amount and charges the card as if a legitimate purchase occurred.

For example, if you use your card to “buy” an item worth $700, the merchant might give you $600 in cash after deducting a fee. Although this may seem beneficial at first, the transaction is still treated as a purchase by your credit card company, meaning you will have to pay back the full $700 later.

Why People Choose Credit Card Cashing

People often choose 카드깡 when they face urgent financial needs. It appears easier than applying for a personal loan or waiting for an approval from a financial institution. Some use it to pay off bills, cover unexpected expenses, or secure quick liquidity during emergencies.

However, this temporary solution can lead to long-term trouble. Since the credit card company treats it as a purchase, the interest rates and fees can become higher than expected. Moreover, the service provider usually takes a commission, which means you receive less cash than the actual amount charged.

Hidden Costs of Large Transactions

At first glance, credit card cashing for a large amount might seem convenient, but the hidden costs make it a poor financial choice. The commission charged by the service provider often ranges from 10% to 20% of the total transaction. When you add this to the credit card interest, the effective cost becomes much higher than expected.

For example, if you use $3500 for a large transaction, you might only receive $3000 in cash after fees. Yet, you will still owe $3500 to your credit card company. If repayment is delayed, the debt quickly multiplies due to compound interest.

Moreover, if your credit card company detects repeated cashing activities, they may suspend your card or blacklist your account, preventing you from using it for legitimate purchases in the future.

Conclusion

While credit card cashing may seem like easy solutions for obtaining quick cash, they can cause more harm than good, especially for large transactions. Quick gains from credit card cashing often come at the expense of financial stability, and recovering from such situations can take much longer than expected.