What is “Credit Card Kiting”?
Credit card kiting is one of the only ways some people see to keep their heads above water.
Similar to check kiting, credit card kiting involves using cash advances from one credit card to pay the monthly minimums on other cards. The debt doesn’t go away; it’s just transferred in a roundabout fashion. It can wreak havoc on your finances, but some don’t see any other way around their bills.
Credit card kiting is a bad idea for a number of reasons, not the least of which being that interest rates are usually much higher on cash advances than on regular purchases. You might be tempted by the pristine courtesy checks you receive in the mail from the credit card companies, but don’t fall for this trap.
Additionally, credit card kiting can lead to investigations by your bank or credit union. Although not necessarily illegal (depending on how you do it), there is legal precident that has labeled it ”nondischargeable”. Also, credit card kiting looks like suspicious activity and could lead a financial institution to believe you are laundering money. This is especially true if you engage in credit card kiting by initiating balance transfers with two credit cards from the same issuer.
“…debtor’s intent to deceive can be inferred from fact that cash advances were used to make minimum payments on other credit cards…”
Most people don’t have the best of excuses to explain their kiting practices, and this can lead to increasingly worse offenses that could damage your credit and financial stability for the foreseeable future. Most financial experts caution against balance transfers and using courtesy checks in general, but credit card kiting is another animal entirely.
So what should you do in this situation? Rather than credit card kiting, try to live without credit card balance transfers. Design a budget that encourages you to live within your means. Get rid of your debts and any unnecessary expenses.
As soon as you consider credit card kiting to solve your financial woes, you should realize that you’re likely in a financial rut. You need to take steps to permanently improve your situation. At best, credit card kiting is only a temporary fix; at worst, it will further worsens your situation. It is important to leverage your strengths in your favor rather than resorting to less-than-honest behavior like credit card kiting.
