They call it laundering because it takes "dirty" money and makes it "clean". That's not what happened here. The money was perfectly clean to begin with.

Which law do you think was being broken? I think the person is pretty clearly not defrauding the bank. Maybe the credit card company doesn't like it, but they almost certainly don't have that in writing because if they'd considered this possibility, they wouldn't have allowed it to be possible in the first place.