Negative Balance / Overpaying Bill

Picnic_2

I would like to use my credit card to buy some flights. They would take me over my credit limit, so I was wondering if I could make a payment onto my credit card first, by overpaying my latest bill, giving myself a negative balance, and then make the purchases.

Has anyone ever done this? Is it possible to do?

(I have overpaid bills by a few pounds before with no problem, but this would be a larger sum of money, so not sure if I am "allowed" to do it)

lisyloo

Technically it isn't allowed.
A large payment might simply be returned to you.

On the other hand it might work, but technically it's against the terms and conditions of using the account.

NekoZombie

Yep, not allowed and sometimes they freeze the funds hich can stop you accessing them for a while. If you're talking large sums i probably wouldn't risk it!

firsttimestudent

As Lislyloo said, you do carry some risks... for example, Section 75 will not cover you if the company goes bust.

But answering your question, I did these twice before:

a) Natwest - My card was declined by the Airline, saying Error Code - Over Credit Limit (or something to that effect). This was my first attempt (on the advice of a Natwest Card Centre staff!), the other staff told me even if you have a negative balance, the 'single debit amount' allowed must be smaller than the credit limit. So had to wait for the negative balance to be returned.

b) Santander Zero CC - Yes, it worked (as I was buying a flight in a different currency). I figured even if it didn't work, it won't cost me to get the excess back anyway.


Let us know which Credit Card you're thinking of doing that!

taxsaver

I've done it several times (up to a couple of thousand pounds into credit) without ever having an issue.

Picnic_2

Thanks for all the replies.

I will probably phone the credit card company and ask them direct if I can do it. (Don't fancy having the card blocked if the transaction is unsuccessful!)

CLAPTON

Picnic wrote: »

Thanks for all the replies.

I will probably phone the credit card company and ask them direct if I can do it. (Don't fancy having the card blocked if the transaction is unsuccessful!)

it would be amazing if they did not simply quote the T&Cs

chattychappy

A different regulatory regime applies to deposit taking. For this reason, CC companies mustn't permit positive balances (unless they devise a suitable product).

Given you can always BACS money to a CC account or obtain refunds on goods, it is practically impossible to stop a transient positive balance.

So I don't doubt it is possible to load a credit card and people have done this. But CCs are obliged to have systems and controls in place to stop it happening in the normal course of business.

My guess is that the FSA (who regulate deposit takers) don't see this as an enforcement priority so some CCs are a little lax.

Money Laundering is another issue - suspicious transactions can cause accounts to be suspended pending investigation.

lisyloo

I wouldn't bother calling them.
The official line will be you can't do it.

I think it's unlikely your card would be stopped, but your money might be returned.

Ash1982

Can't you just ask them to rise your credit limit either permanantly or temporarily to cover the flights?

jonesMUFCforever

Picnic wrote: »

Thanks for all the replies.

I will probably phone the credit card company and ask them direct if I can do it. (Don't fancy having the card blocked if the transaction is unsuccessful!)

When on the phone why not ak them to increase your limit even for a short period of time?;)