Credit card payments on Wise treated as Cash Advances

[dj230]

This was one of my worries with using wise which was recommended by a lot of people and I did some transfers and did see that it was charged as a cash advanced. Cash advance charges usually have added fees (per charge), interest fees (charged starting the day the payment is sent up until the cash advance is paid back, usually around 20% a year), and no rewards/points/cashbacks are awarded for cash advances.

 

Just a heads up for anyone looking to use Wise, an alternative would be paypal which is not charged with as a cash advance and the fees are about the same as Wise

Edited August 16, 2021 by dj230

[riclag]

10 minutes ago, dj230 said:

This was one of my worries with using wise which was recommended by a lot of people and I did some transfers and did see that it was charged as a cash advanced. Cash advance charges usually have added fees (per charge), interest fees (charged starting the day the payment is sent), and no rewards/points/cashbacks are awarded for cash advances.

Just a heads up for anyone looking to use Wise, an alternative would be paypal which is not charged with as a cash advance and the fees are about the same as Wise

First let me say I have many avenues and options  to get money here! Can never have enough imop!

Wise is one of my last resorts . I have a debit card that I don't use in Thailand  I also fund my account via ach domestic transfer from my usa bank !

When I want to transfer money to Bkk Bank, from my wise balance  it is  fast and easy  and the fees are already predetermined !

Maybe your doing something different ,IDK

 

Edited August 16, 2021 by riclag

[JamesE]

Yeah, credit cards learned that "cash advances or the purchase of cash-like assets" had a ton of end runs. People were buying coins from the US Mint and then selling them, keeping the flyer miles and just paying back the card with the cash they got for the coins. Genius.

Are you talking about funding your Wise account via PayPal or transferring directly through PayPal?

Edited August 16, 2021 by JamesE
typox

[Benroon]

2 hours ago, dj230 said:

This was one of my worries with using wise which was recommended by a lot of people and I did some transfers and did see that it was charged as a cash advanced. Cash advance charges usually have added fees (per charge), interest fees (charged starting the day the payment is sent up until the cash advance is paid back, usually around 20% a year), and no rewards/points/cashbacks are awarded for cash advances.

Just a heads up for anyone looking to use Wise, an alternative would be paypal which is not charged with as a cash advance and the fees are about the same as Wise

I don’t understand the problem at all - where was the transfer from and to ? 
 

As for PayPal they are the worst most reckless financial cowboys out there. There are thousands upon thousands of bad reviews for PayPal seconds away. They hide in their Luxumbourg office then when the shit hits the fan claim they don’t have to adhere to your countries laws and you’ve lost your money. 
 

I would urge my worst enemy not to go near PayPal. 

[stuhan]

18 minutes ago, Benroon said:

I don’t understand the problem at all - where was the transfer from and to ? 
 

As for PayPal they are the worst most reckless financial cowboys out there. There are thousands upon thousands of bad reviews for PayPal seconds away. They hide in their Luxumbourg office then when the shit hits the fan claim they don’t have to adhere to your countries laws and you’ve lost your money. 
 

I would urge my worst enemy not to go near PayPal. 

I absolutely hate paypal and never use them ever again.they suck.

[JamesE]

3 hours ago, riclag said:

I also fund my account via ach domestic transfer from my usa bank !

Tell me more...

[dj230]

1 hour ago, JamesE said:

Yeah, credit cards learned that "cash advances or the purchase of cash-like assets" had a ton of end runs. People were buying coins from the US Mint and then selling them, keeping the flyer miles and just paying back the card with the cash they got for the coins. Genius.

Are you talking about funding your Wise account via PayPal or transferring directly through PayPal?

Actually I guess this doesnt' apply to most, but I pay rent on paypal/wise so I benefit from making payments through paypal over wise. I also send money to a friend in thailand and they give me cash, as I have no thai bank account

Paypal has Xoom which is kind of like their version of Wise and also had cash pick up which I will try eventually.

 

37 minutes ago, stuhan said:

I absolutely hate paypal and never use them ever again.they suck.

yea, they have a lot of issues but can't beat getting to avoid cash advance fees + getting reward points/cash back. I'll keep using them if I can

Edited August 16, 2021 by dj230

[Freeduhdumb]

I usually use, I think it is called the "ACH" option from transferring from my U.S. bank to my Thai bank accounts. I usually pay about 1% transaction fee... Never used my credit card for this very reason. 

[JamesE]

Just one suggestion. Lay everything out and understand how it all works. Understand the hidden fees. Understand how money moves. Right now you'll pay the cash advance fee on a credit card plus CA$21 to Wise. But, if you did direct debit, you wouldn't pay anything to your bank and only CA$2.50 to Wise. Plus, Canadian banks are on ACH so you might be able to avoid even that fee.

[stuhan]

4 hours ago, dj230 said:

Actually I guess this doesnt' apply to most, but I pay rent on paypal/wise so I benefit from making payments through paypal over wise. I also send money to a friend in thailand and they give me cash, as I have no thai bank account

Paypal has Xoom which is kind of like their version of Wise and also had cash pick up which I will try eventually.

yea, they have a lot of issues but can't beat getting to avoid cash advance fees + getting reward points/cash back. I'll keep using them if I can

I have my uk pensions paid into my uk bank account, i only have a debit card so i use wise to transfer money to my Thai bank via debit card transaction,wise works out cheaper than my bank and only takes seconds for the money to transfer,so i am happy with wise also very easy and straight forward. I find their fee's reasonable.

[NumbNut]

4 hours ago, JamesE said:

Just one suggestion. Lay everything out and understand how it all works. Understand the hidden fees. Understand how money moves. Right now you'll pay the cash advance fee on a credit card plus CA$21 to Wise. But, if you did direct debit, you wouldn't pay anything to your bank and only CA$2.50 to Wise. Plus, Canadian banks are on ACH so you might be able to avoid even that fee.

yes, explore your options within TransferWise/Wise, there should be a way you can minimise your fee(s) as JamesE states

[BlueSphinx]

9 minutes ago, NumbNut said:

5 hours ago, JamesE said:

Just one suggestion. Lay everything out and understand how it all works. Understand the hidden fees. Understand how money moves. Right now you'll pay the cash advance fee on a credit card plus CA$21 to Wise. But, if you did direct debit, you wouldn't pay anything to your bank and only CA$2.50 to Wise. Plus, Canadian banks are on ACH so you might be able to avoid even that fee.

yes, explore your options within TransferWise/Wise, there should be a way you can minimise your fee(s) as JamesE states

When doing a transfer in local currency (e.g. US $, Euro or GBP) from your US, EU or UK home-country's bank-account that should NOT incur any charges.  The same 'no charges' applies when you receive THB from a domestic Thai bank to your personal Thai bank-account.  

WISE simply acts as the 'middleman' that receives your US $, Euro or GBP, then uses the 'mid-exchange rate' on the exact minute that you said GO on the transfer to put that amount in THB, and then uses its Thai partner-banks to transfer that amount to the Thai bank-account you specified.

That mid-exchange rate is the actual clearance rate between banks (no difference between buying or selling), so it is simply impossible to get a better rate.  That rate fluctuates all the time so it pays to follow these fluctuations and press GO when it is at a high. 

The only you pay when using WISE is the very reasonable fee for their service (typically 1% but gradually lower when transferring larger amounts). 

To summarize: When using the above method (transferring money from your home-country's bank-account to WISE and have them pay it out in local currency to the bank-account you specified) you:

- do NOT pay any fees/charges for the transfer from your local bank-account to WISE (if your bank charges you for that, get another bank);

- do NOT pay any fees/charges to receive the transfer on the foreign account you specified;

- are using the REAL exchange-rate at the exact moment of transfer (not inflated by bank fees);

- only pay a small service-fee to WISE for the 'broker'-service they provide;

- know EXACTLY how much the recipient will get in local currency (no surprises).

 

[dj230]

2 hours ago, BlueSphinx said:

When doing a transfer in local currency (e.g. US $, Euro or GBP) from your US, EU or UK home-country's bank-account that should NOT incur any charges.  The same 'no charges' applies when you receive THB from a domestic Thai bank to your personal Thai bank-account.  

WISE simply acts as the 'middleman' that receives your US $, Euro or GBP, then uses the 'mid-exchange rate' on the exact minute that you said GO on the transfer to put that amount in THB, and then uses its Thai partner-banks to transfer that amount to the Thai bank-account you specified.

That mid-exchange rate is the actual clearance rate between banks (no difference between buying or selling), so it is simply impossible to get a better rate.  That rate fluctuates all the time so it pays to follow these fluctuations and press GO when it is at a high. 

The only you pay when using WISE is the very reasonable fee for their service (typically 1% but gradually lower when transferring larger amounts). 

To summarize: When using the above method (transferring money from your home-country's bank-account to WISE and have them pay it out in local currency to the bank-account you specified) you:

- do NOT pay any fees/charges for the transfer from your local bank-account to WISE (if your bank charges you for that, get another bank);

- do NOT pay any fees/charges to receive the transfer on the foreign account you specified;

- are using the REAL exchange-rate at the exact moment of transfer (not inflated by bank fees);

- only pay a small service-fee to WISE for the 'broker'-service they provide;

- know EXACTLY how much the recipient will get in local currency (no surprises).

PayPal has many of the same benefits, but allows the use of a credit card, without cash advance charges. I’m just using credit cards to build credit and get cash back/Aeroplan points. Adds up, quickly, especially with welcome bonuses. I think a few thousand dollars (2-3 thousand) of payments last month got me $200 in cash back with a welcome bonus on a new credit card. Might as well take the free money.

 

a free plane ticket to Canada is about $6000 worth of payments with a new American Express credit card which is worth $700+ 

 

Paypal offers, instant transfers, ability to know exactly how much the recipient will get, no extra bank fees, and the fees/exchange rate are almost the same as Wise (with a credit card). I think the fees might be cheaper with a bank transfer on paypal but I mainly use paypal to be able to make payments with a credit card.

7 hours ago, JamesE said:

Just one suggestion. Lay everything out and understand how it all works. Understand the hidden fees. Understand how money moves. Right now you'll pay the cash advance fee on a credit card plus CA$21 to Wise. But, if you did direct debit, you wouldn't pay anything to your bank and only CA$2.50 to Wise. Plus, Canadian banks are on ACH so you might be able to avoid even that fee.

I think you’re right, I have to just do a bank transfer with wise and skip out on the credit card. 

Edited August 17, 2021 by dj230

[TSS]

research banks in your country that issue a debit card with no  foreign trans. fees, no ATM fees worldwide  They're out there. For USA it's Schwab. Been with them for 30+ yrs.

[JamesE]

2 hours ago, BlueSphinx said:

When doing a transfer in local currency (e.g. US $, Euro or GBP) from your US, EU or UK home-country's bank-account that should NOT incur any charges.

Sadly, not true for US$ (or CA$). Wise charges a few dollars to receive the money. We savages in North America don't have the "Low Cost Option" and it must be simulated.

[JamesE]

1 minute ago, TSS said:

research banks in your country that issue a debit card with no  foreign trans. fees, no ATM fees worldwide  They're out there. For USA it's Schwab. Been with them for 30+ yrs.

You can get a debit card with Wise that does the same thing. Still stuck with the local ATM fee though.

[longwood50]

14 hours ago, dj230 said:

This was one of my worries with using wise which was recommended by a lot of people and I did some transfers and did see that it was charged as a cash advanced. Cash advance charges usually have added fees (per charge), interest fees (charged starting the day the payment is sent up until the cash advance is paid back, usually around 20% a year), and no rewards/points/cashbacks are awarded for cash advances.

Just a heads up for anyone looking to use Wise, an alternative would be paypal which is not charged with as a cash advance and the fees are about the same as Wise

What would you think the charge against your credit card would be?  If you are asking Wise to place a charge against your credit card and send you cash that is no different than if you went to the local bank and presented your credit card and requested cash.   Sending cash is not a "purchase" 

As to Paypal, I have never used paypal to send money but many places will "give you free"  my bank in the USA included.  However you get fleeced on the exchange rate.  One way or another don't expect any exchange service to provide their services for free. 

 

[dj230]

42 minutes ago, longwood50 said:

What would you think the charge against your credit card would be?  If you are asking Wise to place a charge against your credit card and send you cash that is no different than if you went to the local bank and presented your credit card and requested cash.   Sending cash is not a "purchase" 

As to Paypal, I have never used paypal to send money but many places will "give you free"  my bank in the USA included.  However you get fleeced on the exchange rate.  One way or another don't expect any exchange service to provide their services for free. 

 

I made a payment on Wise, not a transfer to my own bank account, was a payment for rent, as selected before the payment was made on Wise, to a different person. Normally this is not charged as a cash advance.

 

Payments on paypal aren't a cash advance, that was my point of the thread, just a heads up that if you're using a credit card on Wise you'll be charged a cash advance, and won't be on paypal.

 

If you look at the exchange rate/fees on paypal they're about the same as Wise (for credit card transactions)

 

Edited August 17, 2021 by dj230

[riclag]

12 hours ago, JamesE said:

Tell me more...

Bof A charges $3 to do a domestic transfer to the Wise affiliate in the USA , soon there after it shows up in my wise balance !

I used it twice ( I tested the service with small deposits).

For the most part I use my Charles Schwab debit card ,no atm fees!

[Benroon]

14 hours ago, stuhan said:

I absolutely hate paypal and never use them ever again.they suck.

So true - They tried to do me out of 9 grand once - very long story but they lost the case, were told to pay me another grand on top compensation and rebuked strongly for their attitude to the U.K. police and Trading Standards (who they claimed they do not have to recognise!!)

 However I wouldn’t accept it until they issued me a grovelling apology. As the case made the Sunday national papers they had no choice as the editor wanted to see it for his article. I’m not a vindictive person but I do hate bullies! 

Do not touch PayPal ever for anything. 

[stuhan]

Well done ,good to here that.

[dj230]

49 minutes ago, Benroon said:

So true - They tried to do me out of 9 grand once - very long story but they lost the case, were told to pay me another grand on top compensation and rebuked strongly for their attitude to the U.K. police and Trading Standards (who they claimed they do not have to recognise!!)

 However I wouldn’t accept it until they issued me a grovelling apology. As the case made the Sunday national papers they had no choice as the editor wanted to see it for his article. I’m not a vindictive person but I do hate bullies! 

Do not touch PayPal ever for anything. 

This is another reason why I use credit cards instead of bank transfers, I get covered by credit card insurance, forgot to mention this important point.

[JamesE]

10 hours ago, riclag said:

Bof A charges $3 to do a domestic transfer to the Wise affiliate in the USA , soon there after it shows up in my wise balance !

I used it twice ( I tested the service with small deposits).

For the most part I use my Charles Schwab debit card ,no atm fees!

Yeah, I'm on BOA too but my Chase and CapOne accounts charge me 0$ for the same transfer. Don't know why BOA penalizes me for getting my own money from them. Have you tried the Wise debit card? Right now I just use my BKK debit for cash but having a backup sounds like a good idea.

 

8 hours ago, dj230 said:

This is another reason why I use credit cards instead of bank transfers, I get covered by credit card insurance, forgot to mention this important point.

Insurance, really? How does that work? Or are you talking about general purchases and not funding PayPal transfers? Also what does this credit card to PayPal transaction show up as on your cc statement? A purchase? I think something is slipping under the radar.

[dj230]

40 minutes ago, JamesE said:

 

Insurance, really? How does that work? Or are you talking about general purchases and not funding PayPal transfers? Also what does this credit card to PayPal transaction show up as on your cc statement? A purchase? I think something is slipping under the radar.

You're covered by your credit card (at least mine) when you make purchases with it because they can just chargeback the payment if anything goes south. I guess this doesn't help much if you're sending money to yourself, but if you're sending money to someone else it gives a bit of protection.

 

It shows up as a payment to paypal + mechant or the persons last name you're sending to , no cash advance charges

[riclag]

2 hours ago, JamesE said:

Yeah, I'm on BOA too but my Chase and CapOne accounts charge me 0$ for the same transfer. Don't know why BOA penalizes me for getting my own money from them. Have you tried the Wise debit card? Right now I just use my BKK debit for cash but having a backup sounds like a good idea.

 In ten years time that I've used my debit card here ,99% of  my atm usage has been with Charles Schwab debit card!  Fee free.

I have back up bank cards in case something goes wrong !

Edited August 17, 2021 by riclag