Credit card kiting
This article needs attention from an expert in law or Finance & Investment. The specific problem is: needs subject matter expert.(December 2014) |
Credit card kiting refers to the use of one or more credit cards to obtain cash and purchasing power they do not have, or pay credit card balances with the proceeds of other cards. Unlike check kiting, which is illegal under nearly all circumstances, laws against credit card kiting are not completely prohibitive of the practice, thereby allowing it to be done to some degree. It is up to the banks to detect the practice and when necessary, stop it.
In order for prosecution to occur in a credit card kiting scheme, a bank must prove intent to deceive.[1]
Methods
Introductory rates
Many credit cards offer introductory rates, which in some cases, could be as low as 0% to which balances from other cards can be transferred. In theory, this enables the endless transfer of balances between cards, and since so many offers are available, this could be carried out for a long period of time. But many banks now have become aware of this practice, and introductory rates are offered only a limited number of times.[2] In this case, the kiter is delaying legally due balances, and potentially, interest payable to the credit card bank.
Cash advances
Self payment
Many payment services, such as
References
- ^ "Bankruptcy Fraud: Credit Card Kiting". sacramentobankruptcylawyer.us. Retrieved 7 April 2023.
- ^ "What is "Credit Card Kiting"?". Archived from the original on 26 April 2012. Retrieved 5 December 2011.
- ^ "Legal Agreements for PayPal Services". Retrieved 2 April 2012.
- ^ "square User Agreements". Retrieved 2 April 2012.