balance transfer more than actual amount owed

brettcta

I'm looking at my options to clear my overdraft. i have a credit card i use with a credit limit of £500 and one with £2000. i owe about £100 on the lower limit card and nothing on the £2000 card.

my overdraft is around £1,600 - would i be able to do a balance transfer from the £2000 card to the £500 card for £1,700, after it's paid off the owing amount, then transfer the credit balance to my current account to pay off the OD?

essentially a cash advance but at a balance transfer rate (neither of my cards allow a 'super balance transfer' to pay off the OD)

would i be able to do this or is it fraud?

YorkshireBoy

A £1,600 positive balance on a £500 limit may attract an AML investigation.

There could be other options depending on which cards you have, so could you say...or would you prefer not to?

brettcta

the £500 is just a standard student card and the other is a co-op members card.

you can do a balance transfer from the co-op card for 4.9%APR + 3% fee and that's about it

brettcta

i didn't think of the possible AML problems.

thenudeone

AML = anti-money laundering investigation.

It is against the terms of nearly every credit card to deliberately put into credit. There may be very limited exceptions such as the old (now long discontinued) egg money card which was a combined savings account and CC (weird) but otherwise it's a no-no.

CC companies are not licensed as deposit takers and would be in trouble if they allowed people to launder illegal funds by flushing it though a CC account.

Milarky

Pre-loading by a limited amount per month (say £500) could be allowed in a card's terms for legitimate efforts by customers to avoid purchases interest. I doubt there is any facility to automatically reject payments taking an individual account into credit, so the 'breach' would probably only result in the customer being quizzed in the first instance. (I have been concerned a couple of inadvertently timed payments causing fleeting credit balances but nothing came of those.)

chattychappy

thenudeone wrote: »

CC companies are not licensed as deposit takers and would be in trouble if they allowed people to launder illegal funds by flushing it though a CC account.

Indeed they should be in trouble for merely permitting a customer to put a CC into credit, aside from the source of those funds. Because as you suggest, deposit taking is separate regulated activity.