Monthly limit is cumulative, not based on balance?

olbas_oil

I had a problem with my Santander 123 card. I usually use it for daily spending, and pay the balance in full by DD. Soon after a payment date, I used it for a big purchase, and then another smaller one was declined as it would take it over my credit limit. Rather than wait until the DD came out 4 weeks later, I offered to pay the balance, so I could continue to use the card.

I was told that this would make no difference - the credit limit was effective for the month as a cumulative spending total.

Is this typical of credit cards? I was told that it was related to money-laundering, but since the money would have come from my Santander current account, I can't see how that would apply.

grumbler

olbas_oil wrote: »

...I was told that this would make no difference - the credit limit was effective for the month as a cumulative spending total.

Is this typical of credit cards? I was told that it was related to money-laundering, but since the money would have come from my Santander current account, I can't see how that would apply.

I am pretty sure you were told bu11shit.
It's certainly not typical.

olbas_oil

grumbler wrote: »

I am pretty sure you were told bu11shit.
It's certainly not typical.

I rang back the next day to verify, and because I had a cunning plan to ask for an increase in credit limit to give me some ceiling room. It took ages to explain the issue, with the adviser saying all I had to do was pay in some money. He then referred to a supervisor, and confirmed what I had been told the day before. Whether or not I paid off the balance, I had 'used up' the credit limit until 14 Feb.
I explained that this policy was encouraging me to apply for an alternative card, which I have done. I did get a small increase, so I can use this margin in the meantime.


Moral of the story:
1. If you're going to max out your limit, do it at the end of a month, rather than the start.
2. Don't use Santander?


I am particularly interested in how this would work with a Clarity card. (The one I have just applied for). The idea is that you can use this for cash while abroad, and avoid interest charges by making a faster payments credit. But if there is a cumulative limit, that would not work.

Creditcalm

This is not typical at all, and makes no sense.

It may be that there is a delay of a couple of days (depending on how you make the payment), before that portion of your balances becomes "available" again, but that should be it.

I would say don't use Santander! Awful customer service time and time again.

reclusive46

I think I may know what they are referring to. You can only get cashback on spending up to your credit limit, but you can spend more if you pay down the balance (You just won't earn any cashback).

SuperHan

reclusive46 wrote: »

I think I may know what they are referring to. You can only get cashback on spending up to your credit limit, but you can spend more if you pay down the balance (You just won't earn any cashback).

This possibly makes more sense.

I have previously spent over my Santander CC limit, then paid some off and carried on spending before the end of the month, so it can be done.

Remember though, the drawback to spending at the end of the month as you mentioned earlier, it will shorten the interest free period you receive!