Pre-Paying a Credit Card and Section 75 protection

jwet

Hi,

If I were to pre-load/pre-pay a credit card so that it had a credit balance and then used these funds to pay for an item, would I still be eligible for section 75 protection?

Background
My wife and I like using credit cards for the additional protection but dislike the easy ability to overspend (!), so we have been thinking about pre-loading our monthly budget onto our cards and using this to monitor our expenditure and ensure we don't exceed our budget.

[Deleted User]

There are several threads asking this question and the message is always the same, credit cards aren't meant to be used in this way and lenders won't be happy.
To purposely put your credit card into a credit figure you're breaching the terms and conditions.

WillPS

Make a payment to cover the purchase immediately after using your credit card.

You could also part pay on a credit card (in theory 1p should be enough, so long as the value of the item is over £100) and then pay the rest of the bill another way. Do note that I expect you'd have your card shut down pretty quickly if ever you had a successful S75 claim and your card was clearly only used in this way, as you'd be a deeply unprofitable customer.

As @[Deleted User] rightly mentions you are playing with fire if you deliberately put your credit card account in to credit.

MrFrugalFever

Pay on credit card then pay it off out of your planned budget? You only need to pay £0.01p on credit card to benefit from S.75 protection on any purchase over £100.00 and up to £30,000.00.

Zopa credit card (not sure of others though!) offer the function of a 'Credit Cushion' which effectively splits your credit limit and enables you to set a different ceiling of spend than what is actually physically available.

Lenders don't like their cards in credit.

eskbanker

MrFrugalFever said:

Pay on credit card then pay it off out of your planned budget? You only need to pay £0.01p on credit card to benefit from S.75 protection on any purchase over £100.00 and up to £30,000.00.

As pointed out above, s75 protection only applies to individual items costing between £100 and £30K, so it typically wouldn't apply to the majority of routine monthly spending anyway....

jwet said:

we have been thinking about pre-loading our monthly budget onto our cards and using this to monitor our expenditure and ensure we don't exceed our budget.