I currently: Pay with a credit card, get my 3% cashback, and then pay off the credit card with my debit card.
What I would like to do is: Use a credit card (to get my 3% Cash back) to withdraw cash, then spend the cash, then pay off the credit card with my debit card.
Is there any way to do this without paying a cash advance fee (or any fees in general)?
Nope. Or at least, if it were possible the company offering such a credit card would quickly go out of business. Credit card companies make money off of fees from the merchants the user is buying from and from the users themselves. If they charged no fees to the user on cash advances and, in fact, gave a 3% back on cash advances, then it would be possible for a user to:
The company would lose money until they stopped the loophole or went out of business.
While I think this is generally inadvisable, there are sites and communities dedicated to "points churning" credit card reward programs. In general, no there is no easy way to get cash from a credit card, and receive the spending rewards, and not pay fees well in excess of your rewards value.
However, there are people who figure out ways to do this kind of thing. Like buying prepaid Visa cards $500 at a time from drug stores on a 5% bonus rewards month. Or buying rolls of $1 coins from the US treasury with free shipping.
The issue is the source of the fees. When you spend money on your card the merchant pays a fee. When you get cash from an ATM not only is there no merchant remitting a fee there is an ATM operator and a network both charging fees.
You said:
Use a credit card (to get my 3% Cash back) to withdraw cash ...
Then you said:
Is there any way to do this without paying a cash advance fee (or any fees in general)?
Right there you have stated the inconsistency. Withdrawing cash using a credit card is a cash advance. You may or may not be charged a fee for doing the cash advance, but no credit card will offer you cash back on a cash advance, so you can't earn your 3% by using cash advances.
As others have mentioned, you can sometimes get close by using the card to purchase things that are almost like cash, such as gift cards. But you have to make a purchase.
This was actually (sort of) possible a few years ago. The US Mint, trying to encourage use of dollar coins, would sell the coins to customers for face value and no shipping. Many people did exactly what you are proposing: bought hundreds/thousands of dollars worth of coins with credit cards, reaped the rewards, deposited the coins in the bank, and paid off the credit cards. See here, for example.
Yeah, they don't have that program any more.
Of course, this sort of behavior was completely predictable and painfully obvious to the credit card companies, who, as far as I know, never let users net rewards on cash advances. They're trying to make money after all, unlike the Mint, which, uh, well...
