Silly Question About Black Balances

anotheruser

A quick question.

Say you have a credit card that has a limit of £5000 with a current balance of £0.
If someone pays the account £1000, then you go away on holiday, it technically means you have £6000 to spend correct?

Or do card companies not like this?

JimmyTheWig

Technically that is the case, but you are right that in general card companies don't like it.
There used to be a card (Egg Money) that was designed to accept positive balances (it even paid interest on them) but that no longer exists.

What a card company will do in these situations varies between card companies. But I certainly wouldn't rely on it working.

Could you schedule a payment from your current account to your credit card for, say, one week into your holiday?

Tixy

Worse case scenario could be that the credit card company decide to close the account whilst you are on holiday, leaving you without access to even the £5k on the card.

Its almost always against the terms of the account to put in it to a positive balance.

As jimmy says how card companies handle this varies, your scenario could work and you may be able to spend up to £6000, it could trigger the card company to return the £1k payment, possibly by cheque, it could trigger a temporary block on the card or even for the account to be closed.

As suggested making the £1k payment at some point during the holiday/spending would be a better option (or asking for an increased limit).

anotheruser

Thanks for the replies.
I shouldn't think I would need more than what is on the card now but was just wondering

Poppops

I've been in this situation. Kind of. I'd been on a cruise and had endless problems trying to pay my account with a debit card as they kept putting it through as a credit card. Anyway, the next time I went on a cruise I paid my credit card bill off in full well before the due date but made a mistake and overpaid by a few hundred pounds. My account therefore went into credit. Barclaycard rang me to see what was going on and when I explained it was a mistake but I was intending to use the card on holiday, she was fine and just kind of said, please don't do it again!

planteria

it is best not to leave credit cards with a + balance.

a customer of mine used his Egg Money card as a savings account, earning 4% interest on his +balance, aswell as 1% when spending it, but had a problem when his card was cloned and the money that was spent fraudulently was +balance money.

chattychappy

Deposit taking is subject to a different regulatory regime, so lenders have compliance issues if they routinely allow positive balances. They can also become concerned about money laundering. The effect of both is that the card can become blocked or restricted whilst they decide what to do.

It is doubtful that you get S75 protection on transactions wholly paid for out of a positive balance.