Can I manually increase a Credit Card Limit myself and APR interest help?

bery_451

Ok cheers for clarifying.

Terry_Towelling

chattychappy wrote: »

Interesting argument. On balance I probably disagree.

As you say, applying
(4)This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement.

the purchases themselves are not in contravention of the agreement. The contravention was to put the account into credit.

Section (1) says:
(1)If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement (my emphasis)

I think this is the problem. If a purchase is made entirely out of positive balance, then it isn't financed by the agreement.

I understand your thinking - and I have come across the situation before (when working in cards) but cannot recall the view of my card company.

I think a lot may depend on your definition of the word 'financed'. Does it mean 'borrowed' or does it mean 'paid' or does it mean 'provided funds for'? Nowadays we take it for granted that it means 'borrowed' but it doesn't.

The cardholder is still the debtor (the act defines the debtor as the individual entering into a credit agreement), the card company is still the creditor with whom that credit agreement has been signed. At the point the transaction is made, it is a debt regardless of the status of the cardholder's account.

What might be useful is if OP would tell us what they wish to achieve. We might then be able to offer useful suggestions rather than speculation.

OP, Chargebacks apply equally to debit and credit card transactions. S75 applies to credit cards - not debit cards. The purchase price has to be between £100 and £30K to be covered by S75 but the amount you pay by credit card to get that cover can be as little as 1p.

Would you like to share your ambition so we can offer something more concrete? If it is anything to do with hiring a car, S75 is unlikely to come into play - but I can't categorically rule it out.

Ben8282

From the other questions posed by the OP I think it is self evident that they don't currently possess and have never possessed a credit card.
I don't pretend to be expert on such things, but reading section 1(1) as stated above, if the card was in credit and the purchase was made entirely using the funds by which the account was in credit, there was no borrowing and therefore the purchase was made without any financing of it by the credit card company. In such a case I would argue that s75 did not apply to such a purchase.

Terry_Towelling

Ben8282 wrote: »

From the other questions posed by the OP I think it is self evident that they don't currently possess and have never possessed a credit card.
I don't pretend to be expert on such things, but reading section 1(1) as stated above, if the card was in credit and the purchase was made entirely using the funds by which the account was in credit, there was no borrowing and therefore the purchase was made without any financing of it by the credit card company. In such a case I would argue that s75 did not apply to such a purchase.

I'm no expert either and I'm just offering opinions - we all are because we just don't know. I do understand what you and chattychappy are saying and it makes perfect sense but S75 says where a debtor (which is defined elsewhere in the act as someone who has entered into a credit agreement) having financed a transaction under that agreement has a claim against a supplier, he shall have a like claim against the creditor.

My suggestion is that 'financed' simply means 'funded', and doesn't automatically mean 'borrowed' which is the assumption everyone seems to be making. Let me put it another way to show what I mean about the word 'financed'; If I buy two items for £1000 each and finance one with borrowing from my credit card and finance the other with cash from my current account is anyone going to say, 'No you didn't, you financed one and paid for the other'?

Or - I have a £100 credit limit and put my account £100 in credit and then make two £100 transactions on the same day. Both transactions get approved but for some reason transaction #2 then clears before transaction #1. Which one have I financed with borrowing and which one have I financed with my credit balance?

Yes, I'm playing with words and perhaps being absurd (again) but we really need someone with the appropriate legal knowledge to say what the situation really is. Our opinions are of great value in raising awareness of the issues but maybe we could do with certainty - but how do we get it?

faddy

The_Fat_Controller wrote: »

I bought a car a year ago and Nationwide were quite happy for me to put a large credit on my account to do so.

I phoned them first and they said "no problem"

Credit limit was £10,000, car purchase was £15,300

PS. I got my 0.25% cashback on the whole amount.

In my experience NW are also quite relaxed about card being put into credit by a balance transfer.

chattychappy

Terry_Towelling wrote: »

Or - I have a £100 credit limit and put my account £100 in credit and then make two £100 transactions on the same day. Both transactions get approved but for some reason transaction #2 then clears before transaction #1. Which one have I financed with borrowing and which one have I financed with my credit balance?

You've almost persuaded me!

I do remember, though, some received wisdom that debit cards are covered when used with an overdraft, but not a positive balance. But none of this has been decided by a court AFAIK.

It is a pity that there isn't an interpretation section in the Act. Oh wait a moment, there is:

s189 ... “finance” means to finance wholly or partly, and “financed ” and “refinanced ” shall be construed accordingly; ...

So now we're all clear?

Terry_Towelling

Yes, clear as mud:).

I'm not actually suggesting I am right and you are wrong, I'm just challenging the thinking on what things mean in the same way that I'm being challenged - that's healthy (I think).

I'm actually starting to waver the other way because S189 gives further clarification of the term 'debtor'. A debtor is an individual taking credit under the terms of a credit agreement. So, if they aren't taking credit, they aren't a debtor.

The question about overdrafts is interesting, so if you have to sign a credit agreement to obtain and use your overdraft then technically using a debit card whilst overdrawn means you are obtaining credit and are a debtor. Any transactions you so make will be processed using the same pre-existing arrangements as a credit card transaction and so S75 presumably applies.

The only issues with overdrafts are the restrictions that can be placed on you - such as you might be called upon to make immediate repayment. I wonder whether the possibility of having to pay in full on demand is covered by the exclusion in S75.3)c)ii. I imagine that subsection is designed to exclude 'charge card' purchases but might it also exclude overdrafts?

Just off for a lie down.

bery_451

Ok to summarise as long balance is paid in full each month then cardholder won't incur no interest at all?

If so do credit card companies allow direct debits to be set up that auto pays the balance in full each month whatever the balance is?

[Deleted User]

No. They won't incur any interest if paid in full, unless they make cash advances.

Set up a full pay DD.

18cc

So if you overpaid your CC by £15000 and paid for a car costing £15001 then you would definitely get section 75 as you have paid 'as little as £1 on credit'....