flixer wrote:I don't see why any credit card issuer would care because there's no difference to them since they still got their processing fees for the purchase. Am I right?
Often they refund the fees to the merchant for returns. So, no, they do not still get their fees!
The reason card companies charge more for cash advances is because their risk is higher. If you figure out a way to get cash from your card without paying interest right away, you can bet that the scam won't last very long. People figure out those things all the time and exploit them for a while but the card companies eventually find out what was going on and close the gaps.