What Are Cash-Equivalent Credit Card Transactions?

Credit card companies consider certain transactions to be cash-equivalent transactions.

Credit card companies typically charge purchases and cash advances differently. Cash advances are usually subject to additional fees and higher interest rates than regular purchases. When certain items or services are purchased, they are treated as being equivalent to getting a cash advance and subject to the same terms as an advance.

Foreign Currency

Purchasing foreign currency is usually considered a cash-equivalent transaction. This typically applies only when foreign currency is actually received. Transactions made in foreign currencies are subject only to exchange rates and are not considered a cash-equivalent transaction.

Cash Transfers

Traveler's checks, money orders, cashier's checks and wire transfers conducted from nonfinancial institutions are considered cash-equivalent transactions. These items are used like cash and are therefore subject to the same terms as a cash advance.

Casino Chips

Purchasing casino chips is considered a cash-equivalent transaction since casino chips can be immediately redeemed for cash. Casino chips can also be used as cash, which is another reason their purchase is a cash-equivalent transaction.

References

• Bank of America: Glossary of Credit Card Terms