Paying off more than your monthly balance to "increase" credit

scwal

I have an Amex Platinum Cash Back card (which I think is great!) I always pay my bill off in full every month by direct debit.

At the moment, I have been travelling quite a lot with work and need to pass through quite a lot of expenses in terms of hotels and flights. The credit limit is not that high on the card and I have to wait until November until I can increase the limit again.

I just wanted to ask whether I can pay in extra before the direct debit amount is taken out of my bank account so that my limit in effect ‘increases’.

E.g. My credit limit is £2500 and I have spent £2000 in the last month (so my available credit is now £500), with the £2000 to be taken out by DD in 3 weeks time. If however, I pay in £1000, will my available credit increase to £1500? In addition, will the £2000 still coming out of my account by DD and the £1000 that I have paid in be subtracted from my outstanding balance the following month?

Are there any adverse implications from doing this (e.g. will it affect my credit rating?)

Hope this makes sense and sorry if something like this has already been posted!

Thanks!

BenL

Positive loading on credit cards is usually banned in the terms and conditions of the product.

Some card companies are stricter than others. Barclaycard have written to me before when i did it by accident.

Also, if you spend the money from the positive loading you are not actually taking credit so you will not be protected by the section 75 stuff for companies going bust etc.

Work to get you a business card would be preferable, but then you'll miss out on clearing up a bit of cashback

lisyloo

Are there any adverse implications from doing this

It's possible your creidt balance is not insured.
So whereas if a fraudster uses AMEX's money they are insured. whereas if a fraudster spends YOUR money then you might find you aren't insured.

My view is that your employer needs to provide you with a dequate faciities for yor business travel.

scwal

Thanks for your replies, very helpful.

I do have a Corporate Amex as well, however don't get the Cash Back rewards!

Moggles_2

Not advisable, as others have said. Credit card companies take a dim view of any activity which breaches their Ts & Cs

More to the point, you cannot spend more than your entire credit limit normally, regardless of your actual balance (exceptions to this would be lots of transactions under floor limit and delayed transactions from abroad). You can't do it as the £2500 limit on the card is the maximum that can be spent, even if you did pre-load the card.

Everyone should have at least one back-up card, IMO. Why not apply for another cashback credit card, such as Egg Money?

lisyloo

More to the point, you cannot spend more than your entire credit limit normally

I have done this with Egg money (although I realise it's designed to be preloaded).
I was buying my husband a Rolex watch for his 40th birthday and I wanted the 1% cashback.
So I preloaded the card.
Worked fine - BUT - Egg money is designed to be preloaded, so it's not against the Ts&Cs - it's unusual in that respect.

Moggles_2

lisyloo wrote: »

I have done this with Egg money (although I realise it's designed to be preloaded) ... Worked fine - BUT - Egg money is designed to be preloaded, so it's not against the Ts&Cs - it's unusual in that respect.

Yes, exactly.

I wouldn't risk putting any credit card - other than Egg Money - in credit deliberately. Most lenders are relaxed about modest sums that arise temporarily (due to a refund, for instance or making a one-off manual payment too close to your direct debit payment date).

That said, those same lenders may take a different view if you set out to create a positive balance. The greater the sum involved, the bigger the risk that you'll trigger anti-money laundering procedures. From feedback here, these issues are seldom resolved quickly, as many forum users have discovered the hard way, so it pays to keep within the Ts & Cs

angel81

Hi

I don't think the OP is actually talking about pre-loading (ie giving the credit card a negative balance), but about making a payment early, before the DD is due in order to increase the available credit:

scwal wrote: »

E.g. My credit limit is £2500 and I have spent £2000 in the last month (so my available credit is now £500), with the £2000 to be taken out by DD in 3 weeks time. If however, I pay in £1000, will my available credit increase to £1500? In addition, will the £2000 still coming out of my account by DD and the £1000 that I have paid in be subtracted from my outstanding balance the following month?

Would this make a difference to your comments? Would it cause an issue with the DD if a manual payment is made 3 weeks beforehand?

churchrat

hi
my oh has a Corporate Amex card which we once tried to pay before the due date. we were not allowed to do this--thought it was a problem online and tried again on the phone where we were told they would only accept an amount up to the balance on the due date.
Can make life a bit akward if you are going to be away for a while

milan_ns

I've setup my Barclaycard to clear balance every month via DD.

Sometimes I pay early with debit card (I hate owing money, but like cashback and protection hehe) and Barclaycard just reduces my DD to match the remaining balance (I never went into credit).

Ritchie74

angel81 wrote: »

Hi

I don't think the OP is actually talking about pre-loading (ie giving the credit card a negative balance), but about making a payment early, before the DD is due in order to increase the available credit:



Would this make a difference to your comments? Would it cause an issue with the DD if a manual payment is made 3 weeks beforehand?

This is how I read it also. No problem in doing this as the Op would not be in credit (which would affect S75 protection). Just make sure that the payment is cleared onto the card before spending over the £500 open-to-buy (remaining limit prior to making payment) as this would incur ovelimit charges.