To clear up another point:

If you don't pay off your monthly credit card statement in full you will have to pay 25% interest until its paid off

You're not charged 25% interest until you pay it off, you're charged 25% interest split over the year, daily. So .25/365

So if you're balance is $1,000 and you don't pay it for 2 months, you owe:

$1000 + $1,000x(.25/365)x30 days = $1020.54 the first month

$1020.54 + $1020.54x(.25/365)x30 days = $1041.51 the second month

So to actually give you some amount of answer about why what you're doing is historically not a good move: most apps and services that allow you to charge a credit card to get cash, is called a cash-advance and it usually comes with extremely high fees and higher than normal apr that make it not very attractive for people to use, and downright predatory for people that don't know about the high fees.

For example, here's what capital one says about it:

https://www.capitalone.com/help-center/credit-cards/get-cash-advance/

So maaaybe you're not being charged this fee/apr, maybe you are, I'm not sure because i don't use cashapp, but if you aren't being charged this fee from cashapp or your credit card directly, its probably because cashapp is losing this money, trying to entice customers to its platform, as a "courtesy service" to its customers.

Digging into this further, here's the fees I found for capital one:

"The Capital One cash advance interest rate is usually 29.99% (V). The interest rate applicable on cash advances is typically higher than what is charged for other card purchases and it will start accruing as soon as the advance is granted as there is no grace period for it.

You'll also be charged with a cash advance fee of 3% or a $5 minimum."

So instead of paying 25% APR on your old balance, you're now paying 30% APR with a 3% fee on the new balance.

https://wallethub.com/answers/cc/capital-one-cash-advance-fee-1000237-2140768055/

you're the type of person I HATED getting calls from when I worked for visa...people would do dumb shit like this app the time, then be shocked when interest started being added that they didn't account for but they were too uneducated to actually understand how and when charges are applied.

Yes, this is definitely it - a loophole. No way credit card issuers are smart enough to put up guardrails against this.

... yes, that was sarcasm.