Cash App, like any fintech company, has a strict set of rules to keep their users safe and to remain compliant with government regulations.
There are six most likely reasons why Cash App closed your account:
- If you’ve kept your account in the negative for too long
- If you’ve been using a personal account for business purposes
- If you owe a debt elsewhere and have a lien on your finances
- If Cash App or the government suspects you of money laundering or funding terrorist related activities
- For repeatedly using a deceiving $cashtag
- For violating Cash App’s terms of service
As an ex-banker who used to work for Chase Bank, I can tell you firsthand that it’s not always the financial institution that closes your account.
More often than not, they’re just following rules placed upon them by either a state or the federal government.
Cash App is no different. While they have their own rules — rules you can break to get your account closed — they also have government regulations they have to follow.
If your account has been closed by Cash App, check the list down below, where I break each reason down into more detail. If you think it could have been for one of these reasons, it just might be.
Why Cash App Can Close Your Account For Being in the Negative for Too Long
Cash App famously doesn’t let its users get into the negative. While traditional banks charge their users overdraft fees as a consequence of getting into the red, Cash App stops their users outright.
That doesn’t mean that getting overdraft on Cash App is impossible, though. While they’ll deny your purchases if you’re trying to buy something you don’t have a balance for, they will approve transactions that come with a secondary charge later, like leaving a tip at a restaurant.
Some charges come in multiple phases, like getting gas at a gas station. The gas station will usually charge your account $1 to make sure you at least have a positive balance before charging the remainder of the purchase to your account.
The gas station will place a temporary $1 hold on your account because they don’t know how much gas you’re ultimately going to get. If you have $20 in your Cash App and get $35 worth of gas, you’ll first see a $1 charge before being charged for the remainder of your purchase.
This will put your Cash App account in the negative $15. You can also get into the negative for late fees charged or, again, leaving a tip at a restaurant.
As always, I reached out to Cash App to confirm this information. While there are first-hand stories of users online getting their account closed for having a negative balance, namely on Reddit.com/r/CashApp, Cash App themselves say that this isn’t true.
According to the Cash App customer support “advocate” I reached out to, named Jane, Cash App will never close out your account from a negative balance.
I’ve gotten conflicting information from Cash App before, so I’d take this one with a grain of salt. Almost all banks and fintech companies don’t want you to dig a deeper hole than what your debt has already done, so they’ll at the very least lock your account to make sure you can’t take it deeper into the negative.
While I was at Chase Bank, our policy was to freeze an account if it remained deep in the red for more than 60 days and to close it soon after. Chase would then go to credit reporting agencies and let them know you were a bad customer, making it harder to open accounts elsewhere.
Cash App is no different, according to various Reddit users who unfortunately left their accounts in the red for too long on the payment platform.
As a rule of thumb, you should never leave any accounts in your name in the red for too long. It will negatively impact your credit score and make it harder for you to open accounts in the future.
Cash App says they won’t close a negative account, but I wouldn’t risk it if I were you.
Can Cash App Close a Personal Account That’s Been Used For Business Purposes?
Cash App offers their customers two different kinds of checking accounts — personal and business.
Personal accounts can be used for day-to-day spending, like buying your favorite frozen pizza from the grocery store or sending your friend $20 to buy your lunch.
Cash for Business, as Cash App calls the business banking side of their platform, is designed for customers who are small business owners or entrepreneurs and want to use the platform to accept payments for their goods or services and buy items for their business as well.
While most small businesses can use the personal side of Cash App to conduct their business, Cash App doesn’t recommend or allow it. If they find out you’re using a personal account for business purposes, they may reach out to you and request that you convert your account over or open a brand new business account entirely.
If you don’t open a business account and continue making your business transactions through your personal account, there is a good chance Cash App will close your account outright.
This may be because Cash App charges fees to their business banking customers and doesn’t want you to circumvent these fees by keeping a personal account instead.
Changing over to a business account is easy on Cash App. There are also a wide variety of business accounts out there, so take your time comparing them before making a decision.
Can Cash App Close Your Account if You Owe Money to Someone Else?
I saw a lot of my former Chase Bank customers get their accounts closed at Chase because they owed money to another bank.
A lot of people think banks or fintech companies like Cash App don’t communicate with each other.
The opposite is true; in fact, if you have debt at a major financial institution and haven’t repaid it in a timely manner, they will communicate that with every other financial institution around to make sure you don’t just open an account somewhere else.
Better yet, the new bank you want to open an account with won’t want a customer who is unlikely to repay their debts and may just up and run.
Cash App works the same, communicating with credit bureaus and account surveyors alike to make sure you’re not a bad customer. If you have a lien on your finances, something like a garnishment from unpaid fees, Cash App reserves the right to close your account outright.
At Chase Bank, we had a legal processing fee of $75 for this kind of paperwork. I’ve looked through Cash App’s terms of service and it doesn’t look like they have this fee, or something similar, anywhere.
This probably means they are more likely to just close your account outright for legal fees and garnishments than keep them open.
If you have debt with another financial institution, it’s always best practice to pay that debt off before opening an account somewhere else.
Will Cash App Close Your Account if They Suspect You of Money Laundering or Engaging in Terrorist Funding?
This one may seem unlikely to most people, but banks, fintech companies, and all manner of financial institutions are always on the lookout for money laundering and terrorist funding activities.
Ever since the Patriot Act, passed in the wake of 9/11, banks have been under a tremendous amount of scrutiny from the government. It’s why ever financial institutions require your name, address, and social security number before conducting business with you.
Cash App is required to look through your transactions on a regular basis to see if you are laundering money. It’s harder on Cash App as you can only deposit so much cash in one monthly period, but they are still required to monitor your activities.
They’re on the lookout for terrorist funding as well, trying to see if you’re sending money to bad guys as well.
If you’re suspected of either of these wrong doings, Cash App will have no choice but to close your account. Both money laundering and terrorist funding are serious threats, so Cash App may not even give you a heads up before shutting you down.
If this has happened to you, or you suspect that this is why your account was shut down, you’ll need to reach out to Cash App directly to get your account up and running again.
Can Cash App Close Your Account for Using a Deceiving $cashtag?
$Cashtags are Cash Apps fun way of letting their users choose a unique identifier on their app. You can find other users through their connected phone number, email, or $cashtag.
While Cash App doesn’t require you to use something related to your name, they do have a rule that stipulates that they don’t want you to use a $cashtag related to someone else’s name or business.
Say you’re not the multi-billionaire dollar company Nike and you use something like $NikeOfficial for your $cashtag, Cash App considers that deceiving and will ask you to change your account.
Per their terms of service, that I handily went through for this article, if Cash App sees you’re using a deceptive $cashtag, they will require you to change it.
Cash App is very patient with their users, not usually closing their accounts outright without some allowance of remediation.
If you persist in using deceptive $cashtags, they may close your account.
If you’ve gotten a warning before from Cash App about changing your $cashtag, I would heed their warning if you want to keep your account on the platform. They usually won’t warn their customers more than once and will close your account if they see the problem hasn’t been fixed.
Will Cash App Close Your Account for Violating the Terms of Service?
Like any company, the terms of service play a key role in whether or not your account gets banned. Cash App’s are fairly straightforward, having fairly similar rules and requirements of any terms and service.
Again, like any other company, if you violate the terms of service Cash App will close your account.
This can come from a wide variety of problems, including lying about your age or country of residency when opening your account. Cash App is diligent in their authentication process and checks their customers information well after account opening as well.
If you violate their terms of service, it will be hard to get your account opened again.
How Do I Reopen a Closed Cash App Account?
This one is tricky, as once an account on Cash App is closed it’s hard to get it back open again. Sometimes, Cash App does close accounts due to their mistake.
They have a multitude of complicated algorithms that are looking through your transaction history to see if there’s any wrongdoing. Sometimes, the algorithm picks normal transactions up accidentally and claims there to be something wrong, shutting down your account.
If you feel like your account was closed unfairly, you’ll have to reach out to Cash App support directly to restart it.
Can You Open a New Cash App Account After Yours Has Been Closed?
If Cash App has closed your account and won’t reopen it, but you still want to have an account on Cash App, your only option may be to use a brand new email and phone number to sign up.
If you do the same things that got your first account shut down, don’t be surprised to see the same thing happen again.
More Useful Articles About Using Cash App:
- How to Use and Pay With Cash App Without a Card
- 4 Ways to Put Money on Cash App Card (Gift Cards Don’t Work)
- Don’t Fall for It: The Top 13 Cash App Scams of 2023
- 7 Quick and Easy Solutions to Fix Failed Cash App Transfers
- Cash App Bank Name and Address (Direct Deposit Form)
- Cash App Card Top Up Made Easy at 7-Eleven Stores