Introduction: What This Method Is and What It’s Called
The method we are about to explore is called Credit Card Cashing, known in Korean as 신용카드 현금화.
In simple terms, it is a process of using your credit card limit to obtain real cash by paying a fee. Instead of buying an actual product, you’re essentially “buying cash.” A broker or middleman processes the transaction by pretending you purchased goods or services, and then transfers the equivalent amount (minus their commission) into your bank account.
This method has become a fast solution for people who urgently need money. However, while it can provide immediate relief, it also carries high risks, significant fees, and even legal consequences.
How Credit Card Cashing Works
To understand credit card cashing, let’s break down the process step by step:
- Initiation – You approach a broker or service offering cashing.
- Card Transaction – You use your credit card to make a “purchase.” Often, this is recorded as a service or product on paper, but in reality, nothing tangible is exchanged.
- Cash Transfer – The broker deducts a fee (often 10–20%) and transfers the remaining amount into your bank account.
- Repayment – Later, you must repay the full amount charged to your card company.
For example, if you “purchase” ₩1,000,000 through this method, you may only receive ₩800,000 in your account after fees, but you still owe the card company the full ₩1,000,000.
Why People Use This Method
Credit card cashing thrives because it provides speed and accessibility. No paperwork, no waiting for loan approvals, no background checks. People use it when:
- Emergency expenses arise, such as medical bills.
- Small businesses need fast working capital for operations.
- Students or freelancers experience delayed payments.
- Everyday consumers face sudden shortages before payday.
When traditional loans feel slow or inaccessible, credit card cashing feels like a quick fix.
Real-World Example: Mr. Park’s Café
Mr. Park, who owns a café in Seoul, suddenly faces a breakdown of his espresso machine. Repair costs ₩800,000, but his business account is nearly empty.
With a ₩2,000,000 limit left on his card, he uses a broker. He swipes for ₩800,000, pays a 20% fee, and receives ₩640,000 in cash via transfer. The café resumes operations, customers return, and his day is saved.
But the catch? He still owes ₩800,000 to his card company meaning he paid an effective fee of ₩160,000 just to survive that day.
Legal Reality: Why It’s Risky
While the process might sound resourceful, 신용카드 현금화 (credit card cashing) is often considered illegal in Korea and heavily restricted in many countries.
- It disguises transactions. Banks expect real goods/services, not hidden cash withdrawals.
- It encourages fraud. Fake merchants or ghost stores act as intermediaries.
- It undermines regulation. Card systems are designed to prevent this kind of disguised borrowing.
Penalties may include card suspension, fines, and even criminal charges.
Is Credit Card Cashing Safe?
At first glance, it mirrors a regular purchase. You swipe, receive something, and promise to pay later. The only difference is that the “something” is cash. But with 카드깡, that’s exactly the problem: cash is not a legal purchase item under card agreements. Banks already provide official cash advances with clear rules. Cashing bypasses these, creating risk for both the user and the system. So while the process feels smooth, it is neither safe nor sustainable.
Hidden Costs of Cashing Out
Beyond the obvious fee, there are multiple hidden burdens:
1. Steep Fees
Most brokers charge 10–20%. A ₩1,000,000 transaction may shrink to ₩800,000 in your account.
2. Full Repayment Obligation
You owe the full amount to the card company, not the reduced net you received.
3. High Interest if Delayed
If you fail to repay, interest compounds rapidly.
4. Suspension and Penalties
Card issuers track unusual transactions. Multiple cashing attempts can freeze your account.
5. Legal Risks
Being involved in 신용카드 현금화 (credit card cashing) could expose you to fines or even fraud charges.
Another Example: Ms. Kim’s Trap
Ms. Kim, a student, cashes ₩500,000 monthly to pay rent. After fees, she only gets ₩400,000. Over six months, she owes ₩3,000,000 to the card company but has only received ₩2,400,000.
Her debts outpace her resources, pulling her deeper into financial stress.
Why It Still Happens
If it’s risky, why do people still do it?
- Speed – Funds are available within minutes.
- Access – Even those with poor credit can use it.
- Illusion of control – Users believe they’ll repay quickly and avoid long-term harm.
It’s very similar to payday loans in Western countries: a temporary fix with long-term consequences.
Safer Alternatives to Consider
Instead of risky cashing, consider these options:
1. Bank Cash Advances
Legal and regulated, though they carry interest, they are safer than hidden broker transactions.
2. Microloans or Personal Loans
Financial institutions offer short-term loans with far lower fees.
3. Negotiated Payment Delays
Landlords, utilities, and service providers often grant extensions if you explain your situation.
4. Peer-to-Peer Lending
Digital lending platforms provide fast access with transparent terms.
Global Context: Different Faces of Cashing
- United States – Legalized through cash advance checks or ATM withdrawals, but with high interest.
- Japan – Cashing shops exist but face strict monitoring.
- Korea – Government strictly warns against 신용카드 현금화 (credit card cashing) due to high fraud risks.
The motives are universal urgent liquidity but regulations differ across borders.
Psychological Side of Cashing
The biggest danger may be psychological. Each transaction feels like solving today’s problem cash in hand, a crisis averted. But tomorrow, the debt grows larger. This loop creates dependency.
It’s like patching a leaking roof with paper it might hold for the moment, but the storm will return stronger.
Building Stronger Financial Habits
To avoid falling into cashing traps, here are habits worth cultivating:
- Emergency Funds – Even small savings prevent desperate choices.
- Budget Tracking – Know where every win goes.
- Healthy Credit Use – Treat cards as tools for planned spending, not shortcuts to cash.
Recap: Key Lessons
- The method is called Credit Card Cashing (신용카드 현금화).
- It works by disguising credit card transactions to receive cash.
- It provides quick access but at high cost: steep fees, debt traps, card suspensions, and legal penalties.
- Real-life examples show short-term relief often creates long-term harm.
- Safer alternatives include official cash advances, microloans, and negotiated delays.
Personal Opinion
Credit card cashing shows how resourceful people become under financial stress but also how risky shortcuts can be. While it can provide quick money, it is neither safe nor legal.
In my opinion, building awareness, emergency savings, and access to safer credit products is a much smarter path than leaning on 신용카드 현금화 (credit card cashing). Desperation should not push anyone toward financial traps that only worsen tomorrow’s problems.
