Bank not refunding full balance on credit from holiday company

Berniestevenson

My Lloyds credit card has been credited with £2798 for a cancelled holiday due to the coronavirus outbreak.  I rang up Lloyds and asked them to transfer this amount to my Lloyds current account. After a long wait I was told that they could not transfer that amount as I only had a credit of £1276 as I had a balance on my credit card.  My credit card bill has been paid every month in full since I opened the account 15 years ago which I relayed to them and my credit limit on the card is £12,500. My credit card monthly repayment is on the 29th of the month so I have a mixture of monies owed from this month  and the overspill of this month. I was told I would only get the rest of the balance if my credit card was not used. So in essence they are saying I have a credit limit of £12,500 and I cant use any of this if I want the money that I have already paid to them refunded!! My argument is I paid this £2798 to them in January and now it is refunded they will not give me what I have already paid for. Can any one advise me if this is legal?
Thanking you in anticipation.

[Deleted User]

Yes, very legal.  

They'll only send you the credit balance.  If you want to withdraw more of your limit, you can do so as a cash advance, but bear in mind the fees. 

Alternatively, just use the money you would have spent on clearing the balance on the 29th.

digalumps

Your post is a little bit confusing but I think you mean that you have received the credit from the holiday company which put your credit card balance in positive amount by £1276

this is the amount they can refund you - they can only refund positive balances

born_again

So a refund of £2798
You pay in full each month
They will only refund £1276
Ergo, you have a debit balance of £1522 on the account or to put it another way. You have spent £1522 since you last paid.

You only get back any amount that leaves you in credit.

bradders1983

Get the £1276 refunded, add in the £1522 you was going to use to pay the card off, and there is your £2798.
Where is the problem?

SuperAllyB

bradders1983 said:

Get the £1276 refunded, add in the £1522 you was going to use to pay the card off, and there is your £2798.
Where is the problem?

Might be a potential issue if Lloyds still take the full DD (can never remember which banks do and which don't) but even then OP would just need to request another refund after the DD had been taken and allocated to the account.

bradders1983

Exactly, making a molehill out of nothing. He can even cancel the DD if he has one, and set it back up after the due date.

Or, if he is regularly spending a grand a month on a credit card, he could just leave it on there and spend it, and put aside the money along with the £1522 as he goes. Wouldnt take long to spend it up by the sounds of it.

ratechaser

Well when (and if) I finally get my holiday refund from TUI, I'd only expect Amex in turn to refund the amount it puts me into credit by. It all comes out in the wash, will be less to pay off against the next 1 or 2 statements.

Of course if you are carrying a CC balance from month to month, I can see why this might not be ideal, but on the plus side it does clear your balance in one go and give you a fresh start...