Here's Why Chase Cardholders May Soon Pay More for Cash-Like Transactions

by Natasha Gabrielle | Updated July 21, 2021 - First published on March 27, 2021

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People who use their Chase credit cards like cash or a debit card may soon get charged more.

If you've been using your credit card to pay others through cash payment apps, you may want to consider changing your habits. That's because Chase cardholders may soon pay more for cash-like transactions when using a Chase credit card. Chase has recently announced updates to its cardmember agreement terms, and these changes will go into effect in early April 2021. A portion of the updated cardmember agreement discusses cash-like transactions and notes changes to how these transactions will be treated.

Cash-like transactions will be treated as cash advances

Cash-like transactions can include the following:

  • Purchasing traveler's checks, foreign currency, money orders, wire transfers, cryptocurrency, and other similar virtual currency
  • Purchasing lottery tickets, casino gaming chips, race track wagers, and similar online and offline betting transactions
  • Person-to person money transfers and accounting funding transactions
  • Making payments using a third-party service, including bill payment transactions not made directly with a merchant or service provider

It's worth noting that this is not an exhaustive list and may include other similar transactions.

Since cash advances come with an added cost, you can expect that these cash-like transactions will soon come with fees. Cash advances are not cheap. Most card issuers charge a fee for cash advances, and these transactions also have a high APR interest rate. Because of these costs, it's recommended you never get a credit card cash advance unless you're out of other options.

That means if you've been doing the following, you may soon pay more:

  • Using a Chase credit card to pay friends or family members through payment apps such as PayPal or Venmo
  • Using a Chase credit card to pay bills through an outside payment processing system
  • Using a Chase card to bet online through gambling apps or at casinos

What will happen if you keep making these choices? You can expect to be charged cash-advance fees and expect to pay higher interest on these types of activity once the updated cardmember agreement terms go into effect. Wondering how much you might pay? It's best to check your own card agreement, but Chase lists an example cardmember agreement on its website, and these are the fees listed:

Cash-advance fee: Either $10 or 5% of the amount of each transaction, whichever is greater

Cash-advance APR: 24.99%

You can avoid these fees by no longer using your credit card for cash-like transactions. It's best to consider your spending habits and make adjustments as needed so that you can avoid unwanted extra fees.

The exact date that these changes go into effect depends on the Chase card that you have. If you're unsure when to expect these changes, you can contact Chase's customer service team or search your email inbox for a message with the subject line "Important information regarding changes to your Chase account" to read your updated agreement.

How to avoid cash-advance fees

If you want to ensure that you avoid cash-advance fees and accidental cash-like transactions from posting to your account, contact Chase. You can adjust your cash-advance limit. You may want to make this limit zero or as low as possible so that you avoid accidentally paying more.

The bottom line

Pay attention to changes to your credit card account terms. If you get an email or letter from Chase, be sure to read the updated terms so that you avoid surprises. Now that you know about these cash-like transaction updates, you can adjust your habits and avoid unwanted fees. If you're looking for a new credit card, take a look at our list of top credit cards for inspiration.

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