CC Overpayment in order to make large purchase

floppyarms

Hi All,

Newbie here so please be gentle. I am soon paying for my honeymoon which I have been saving for over the last year of so. I have the cash in my bank however (even with a sur-charge) I would still much rather pay on my AMEX card, not only for the airmiles but also the added protection/insurance.

I can contacted MBNA to request either a new credit limit or a temp rise but both were refused (which I am ok with), I pay via bank transfer each week to make sure I don't run up a bill. I am able to over pay, that is I can quite easily send too much money to them and the account simply shows as being in credit. Does anyone know if it is possible to "pay" the amount over my credit limit that I require, in order to then have an "available balance" over my credit limit - would my transaction go through?

For example (made up figures):

Credit limit = £1,000
Holiday cost = £1,500
Cash in bank = £1,500

Can i pay £500 onto the CC, then buy everything on the CC leaving it maxed out in this case, then pay off the remaining balance?

Sorry if that is a long winded way to explain. Anyone done this before? Any issues I should be aware of?

Cheers

Floppy.

dazza.mk

Easiest thing is to pay a deposit on the credit card and pay the rest in cash... You'll be fully covered by Section 75 protection (assuming you meet terms for a Section 75 claim), you don't have to have paid the full value on cc for complete cover.

However note if you are buying this via a Travel Agent Section 75 protection would be limited anyway (see buying from third parties section of Article).

http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

As its a Travel purchase I'm presuming they're charge for Amex use, as such the airmiles are irrelevant, as you'll probably find their actual value is lower than the charge you'll be paying.

CLAPTON

usually it's against the T&Cs of CC to have a positive balance
although some will de facto allow this others will bounce the payment back

so you risk being left without any credit just when you need it.

dzug1

You are still covered if you pay only part of the cost on your CC

As to whether it would work or not - totally unpredictable.

Most credit cards have a T&C that thou shalt not deliberately overpay - whether yours does or not no idea.

What happens if you ignore that clause ranges from nothing to return of the payment to blocking the card. Even with the same card issuer you can't rely on them being consistent - yours would seem to be tolerating it but might not for a larger sum

All you can really do is try it and see. If it goes wrong there may be a bit of sorting out to do which will take time

And there is a view that if you are (effectively) paying with your own money rather than the CC company's then protection doesn't apply. Others disagree with this view - I'm not aware that it's ever been conclusively settled.

Personally I wouldn't risk it for the sake of a few poxy air miles - but it's your shout

Gromitt

typically the limit is still there so even if you were in credit by £500, payments can be refused if you go over 1K in a single transaction.

missile

I asked Capital 1 and they were OK to accept overpayment but did warn me that there was a risk of being unable to recover that money should my card be stolen hacked.

Have you asked Amex to increase your limit?

Have you considered applying for a.n.other card?

Good luck with the wedding.

thenudeone

Putting a card into positive balance is usually against the T&Cs and could result in the account being frozen (with your money in it) whilst they investigate for potential money laundering. This happened to me in the past.

In any case, if your credit card is in a positive balance (because you've overpaid), you are probably not covered under s.75, because you are not borrowing the money, and the card is no longer a "credit token" as defined by law.

floppyarms

Thanks everyone, there is some really useful information and food for thought here!

:beer: