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Cash-out is an economic term, which refers to taking advantage of the subtle differences between the prices of the same product or almost equivalent products in different markets.

Illegal cashing generally refers to the exchange of cash benefits by illegal or false means. According to the Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Specific Application of Laws in Handling Criminal Cases of Impairment of Credit Card Management, cashing refers to the direct payment of cash to credit card holders through fictitious transactions, false pricing and cash return. Using point-of-sale terminal equipment (POS machines) in violation of state regulations. In the merchant risk management rules of UnionPay card acquirer of China UnionPay, the definition of cashing behavior is: the merchant colludes with bad cardholders or other third parties, or the merchant takes cash by fictitious transaction.

Social harm

First of all, credit card cashing has increased the unstable factors of China's financial order. China has a strict access system for financial institutions and a series of strict regulations to monitor the inflow and outflow of funds from financial institutions. Those lawless elements and merchants, through virtual POS machines to swipe their cards, withdraw cash in disguised form by credit cards and other false transactions, are outside the legal framework, which violates the state's legal provisions on financial business franchising and deviates from the relevant provisions of the People's Bank of China on cash management, and may also provide convenient conditions for illegal activities such as "money laundering", which undoubtedly lays an unstable factor for China's overall financial order. In addition, the increase of bank risks and the formation of a large number of non-performing loans will also destroy the social credit environment and hinder the healthy development of the credit card industry.

Secondly, the harm of illegal cash withdrawal to the issuing bank is enormous. Most credit cards are unsecured lending instruments. As long as the cardholder makes a consumption, the bank will bear the repayment risk. Therefore, in general, banks guard against overdraft risk through high overdraft interest or cash withdrawal fees. The act of cashing in credit cards just circumvents the high cash withdrawal fee set by banks and crosses the bank's prevention threshold. In particular, some loan intermediaries help cardholders forge identity materials and constantly increase the credit card quota, which greatly interferes with the normal business of banks and brings great risks. Because of holding a large amount of cash, the cardholder is tantamount to obtaining an interest-free and unsecured personal loan. However, the issuing bank cannot know the purpose of these funds, and it is difficult to identify and track them effectively. In fact, the credit risk of credit card has evolved into the credit risk of investment or speculation. Once the cardholder can't repay the cash amount, the bank loses not only the loan interest, but also a lot of assets.

Finally, for the cardholder personally, the credit card cashing behavior also brings great risks to himself. On the surface, cardholders get cash by cashing out, which reduces interest expenses, but in essence, cardholders need to repay after all. If the cardholder can't repay the loan on time, he must bear the overdue repayment interest higher than the overdraft interest, which may cause a bad credit record. It will be very difficult to borrow money from the bank in the future, and even bear the legal risk of personal credit loss.