There are some issues with your reasoning.
If the credit card company (Chase Visa) indeed coded those CDs transactions as purchases (instead of cash advances) in the last two months, you would have received the miles by now (assuming both billing cycles had closed). Otherwise, you would have been hit with both the transaction fee (3%, I think) and high APRs. Can you verify not only Chase didn't charge you for cash advances but also you got the miles?
You didn't mention the catch. For those who don't want to pay any interest on credit card charges, all the balances have to be paid off each month. If you do have available fund ($200K+) floating around to pay everything off monthly and play the game in the coming weeks, by all means, go ahead.
I know some banks will accept initial funds from credit cards (Citi Bank for one). Such transactions will be treated as purchases but come with a cap. Some cap at $250 or $500. I once funded my Citi checking with a citicard under this scenario.
If you don't have elite status, I believe there's a cap on the miles you can earn from credit card charges per year. I think the cap is much lower than $200K.
I am not aware of Chase not imposing caps on charges using as initial funds. If you were using the visa/debit card, that's another story. BTW, judging by the $30 annual fee, it sounds more like a visa/debit card. If that's the case, you only earn 1 mile per $2 purchases.
Please visit our
Credit Card Promgrams/Partners Forum and see how FTers take advantage of the miles-earning opportunities as well.
Welcome to FT!