Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

In terms of anti-money laundering regulations, what does overpaying a credit card with 'dirty money' allow an individual to do?

1. Avoid credit card interest

2. Withdraw funds from ATMs globally

3. Improve credit ratings

4. Access cash back rewards

The correct answer is: Withdraw funds from ATMs globally

Overpaying a credit card with illicit funds can facilitate the ability to withdraw cash from ATMs, effectively allowing an individual to convert "dirty money" into clean cash. This method exploits the credit system, as once the credit balance is overpaid, the individual can withdraw the excess amount as cash. This is a concerning tactic in money laundering schemes because it enables the individual to dissociate the illicit origin of the funds from their usage. While withdrawing funds internationally could pose risks based on transaction tracking and regulatory scrutiny, the manipulative use of a credit card balance to access cash serves as a pathway for laundering money by creating the appearance of legitimate transactions. Other options, such as avoiding credit card interest, improving credit ratings, or accessing cash back rewards, do not serve the primary purpose of laundering money. Instead, they focus on financial benefits or incentives that don't align with the laundering mechanism being highlighted in this context.