Originally Posted by Steve M

Assuming a particular set of transactions isn't fraudulent (that is, assuming they are made by the authorized cardholder), there's another problem: It may be very difficult for a card issuer to distinguish charging patters between an MSer that is trying to earn points or cash back, and a cardholder that is in financial difficulty and is using the cash conversion aspect of the charges to do cash advances against the accounts, possibly in great excess of the cash advance limits. People doing the latter are also highly likely to default in short order.