Pre-loading CC - your experience

chattychappy

I regularly use Zero/Clarity to obtain foreign cash overseas. By regularly, I mean weekly, sometimes daily but always at least a couple of times a month.

Typically I pay off the withdrawn amount a couple of days later so I pay only pence in interest.

The question often comes up "can I pre-load my CC to avoid paying interest?". The answers are usually:

1) It's against your T+Cs
2) It's not worth the risk of getting your card blocked/cancelled
3) It will only be a few pence anyway.

Consumer lending follows a different regulatory regime to deposit taking, so CCs really aren't meant to allow people to run positive balances.

Given the question is always being asked, I wonder what peope's real experience of doing it is...

In my case, I accidentally sent an extra £800 to Santander Zero 3 weeks ago. I only just noticed and have made 3 ATM withdrawals in the meantime without a hitch.

guesswho2000

chattychappy wrote: »

I regularly use Zero/Clarity to obtain foreign cash overseas. By regularly, I mean weekly, sometimes daily but always at least a couple of times a month.

Typically I pay off the withdrawn amount a couple of days later so I pay only pence in interest.

The question often comes up "can I pre-load my CC to avoid paying interest?". The answers are usually:

1) It's against your T+Cs
2) It's not worth the risk of getting your card blocked/cancelled
3) It will only be a few pence anyway.

Consumer lending follows a different regulatory regime to deposit taking, so CCs really aren't meant to allow people to run positive balances.

Given the question is always being asked, I wonder what peope's real experience of doing it is...

In my case, I accidentally sent an extra £800 to Santander Zero 3 weeks ago. I only just noticed and have made 3 ATM withdrawals in the meantime without a hitch.

I did it many years ago when I wanted cheap cash to buy a car. Barclaycard offered 6.9% for life BTs with no fee, so I transferred a several thousand pound "balance" from NatWest, resulting in the NW card being in credit, which I then asked them to txfer to my current account.


No issues whatsoever. Though I definitely wouldn't recommend that course of action, I wasn't doing anything illegal, so the worst I expected was a block or funds returning, I considered it worth a try at the time!

agrinnall

Other than the possibility (which seems quite remote) of the card being blocked or even cancelled, I think the main issue is that one that you hint at of not having S75 protection if you make a purchase using funds that had put the card into credit. Whether this has ever happened is, I guess, one of the things that you're trying to find out in this thread.

T-G-C

If it is a reasonable amount and for a short period of time, Capital One will allow the credit balance to sit until consumed.

That being said, it should not be a frequent practice nor one of excessive volume. Due to how credit cards operate, it is a serious violation to put them into credit intentionally.

In some circumstances, where there is a refund or small overpayment, the provider will often work with the customer to remove the credit balance ASAP. Where there is evidence of fraud, intentional credit or a frequent occurrence, there are grounds for the lender to terminate their credit agreement with you.

The overall advice is to avoid being in credit -- and where it happens, work with the provider to correct the balance ASAP to avoid unnecessary infraction.

If wanting to avoid interest through spending a positive balance on a credit card, use a debit card instead, which is designed for such. As Section 75 protection does not apply, there is no benefit to avoiding a debit card.