Putting money on a credit card in anticipation of large payment?

[stevensfo]

I've had an Lloyds credit card for at least 30 years but didn't use it much for probably 20 years. I think I used it very occasionally for small things just to keep it active.

Over years, the limit has come down from the original 5000 to 1000. Even Lloyds have reached the 21st century and I can pay the balance and see everything on line now.

If I wanted to pay for an expensive flight, hotel etc and get the protection provided by cc payments, would it be okay for me to simply transfer the amount to my cc account a week before using it?

I'm a bit concerned that despite the balance being sufficient, the official limit in place would stop the transaction.

Or maybe just email them first to explain the situation?


Steve

[Itsallaguess]

If I wanted to pay for an expensive flight, hotel etc and get the protection provided by cc payments, would it be okay for me to simply transfer the amount to my cc account a week before using it?

I'm a bit concerned that despite the balance being sufficient, the official limit in place would stop the transaction.

This Lloyds page seems to suggest that you can do it from your on-line account -



Source - https://www.lloydsbank.com/credit-cards/help-and-guidance/credit-card-limits-explained.html

Although note the section that says 'Although, we’ll only offer you an increase if we think you can afford it.', which might depend on having a more thorough spending history than the one you've had with this particular card.

Failing that, their 'Contact Us' page gives the following telephone contact for Credit Card enquiries, so it will be worth giving them a ring to discuss your limit if the above online process doesn't look to be available to you -

Credit card enquiries - 0345 606 2172

https://www.lloydsbank.com/contact-us.html

Cheers,

Itsallaguess

[Lootman]

I asked a similar question a while ago although I cannot find the topic right now.

Basically you can but some card issuers appear not to like the practice too much. One issuer actually sent me a refund cheque when I had a credit balance over a month-end, saying it was "fraud protection", whatever that means.

But I have pre-paid cards with a zero balance before now in anticipation of a major charge in the future and it worked. You can also make interim payments on your card when no payment is due in order to raise the effective balance that is available.

[scrumpyjack]

I have done this with my credit card (not Lloyds) in the past with no problem, in order to pay for private hospital treatment (and get the 0.5% cashback).

[Stompa]

Bear in mind that you only need to have made part payment on a credit card to be covered.

https://www.moneysavingexpert.com/recla ... purchases/

[kempiejon]

I have done this with my credit card (not Lloyds) in the past with no problem, in order to pay for private hospital treatment (and get the 0.5% cashback).

I too have done it but it's not allowed as per T&Cs. My Halifax credit card (part of lloyds group) is currently in credit and has been for months as I cleared an outstanding balance transfer amount just before the DD was collected.

From https://www.lloydsbank.com/assets/media ... itions.pdf

You must not pay us more than you owe when you make payments to your account, or transfer funds from another credit or
store card if this creates a credit balance on your account. If ever there is a credit balance on your account, we may apply it to
any recent transactions not yet shown on your account, or to transactions made after the date your account goes into credit.
We may also return any credit balance to the account from which the money has been sent or pay the funds into a deposit
account you hold with us.

[stockton]

The providers of my principal credit card will not allow the card to be paid into credit and refuse to raise my credit limit. Consequently, on occasion, I have to book accommodation or car hire and then cancel so that my account is pushed into credit.

[SalvorHardin]

I asked a similar question a while ago although I cannot find the topic right now.

Basically you can but some card issuers appear not to like the practice too much. One issuer actually sent me a refund cheque when I had a credit balance over a month-end, saying it was "fraud protection", whatever that means.

Banks don't like people having a positive balance on their credit cards because of the money laundering rules. Apparantly it's a big warning sign.

I was told this some years ago after my branch asked me to stop doing it (every quarter I would pay in a cheque for what was owed plus what I expected to charge to the card in the next two months).

[Padders72]

They call it pre-loading and they don't like it. You might get away with it but I bet the just refund the payment from whence it came. How will they make money if you pay it off before you spend it? Well I am sure that is how they think anyway. Be prepared for grief if they pick up on this and don't like it. And they wont.

If you want to raise your credit limit, call and ask. They will like this and oblige as long as you aren't a bankrupt.

[didds]

They call it pre-loading and they don't like it. You might get away with it but I bet the just refund the payment from whence it came. How will they make money if you pay it off before you spend it?t.

im sure generally speaking you are correct but how do they make any money if one pays the CC bill off in full each month in time ? (aside from the vendors charge of coiurse which would be the same if you preloaded as well.)

[Padders72]

They call it pre-loading and they don't like it. You might get away with it but I bet the just refund the payment from whence it came. How will they make money if you pay it off before you spend it?t.

im sure generally speaking you are correct but how do they make any money if one pays the CC bill off in full each month in time ? (aside from the vendors charge of coiurse which would be the same if you preloaded as well.)

You make a valid point but that is how it is. I have a card where I have never paid a fee and they have ramped up the APR on it almost as a punishment but of course it is just a bigger incentive to not ever pay a fee. My point about the pre-loading is based in fact though, I think its a legal or regulatory thing, you can't carry a pos balance on a credit card.

[Lootman]

I think its a legal or regulatory thing, you can't carry a pos balance on a credit card.

In my experience you can carry one but then if there is no further activity on the card, the card issuer sends you a cheque.

In other words you can temporarily carry one. But not longer term. After all if a vendor issues a refund to your card you may carry a credit balance at least for a while.

[stockton]

If you want to raise your credit limit, call and ask. They will like this and oblige as long as you aren't a bankrupt.

Unfortunately this is not true for some of us pensioners.
The refusal to raise credit limits for people who are reasonably well-off but only have a relatively small income is actually becoming a nuisance if, for example, you need to pay for new flights as a result of a cancellation or make several deposits on hire cars closely sequenced.
I am actually thinking of making a complaint to the FCA about the problems caused by their inadequate regulation.

[stevensfo]

Thanks for all the advice guys!


Banks don't like people having a positive balance on their credit cards because of the money laundering rules. Apparently it's a big warning sign.

I think that for some reason I had about 4 quid credit on my Lloyds card for over ten years. I must be high on their list of suspects by now!

So, as I understand it, the reason that ccs don't want me to pay the correct amount into the card before using it, is that they hope that I won't be able to pay off the full amount and thus incur their horrendous rates.

Maybe it's my upbringing, but there's something here that feels just so wrong!

Sorry to go off at a tangent, but many years ago, there was a large appliances store called 'Powerhouse' in Stevenage. For those unable to pay the full amount right away, they had a scheme with a difference, a cunning plan! They didn't allow the amount to be paid off in installments, but simply didn't ask for a single penny for a few years, after which the person had to pay off the full amount or pay it off slowly at something like 30% interest!! They knew damned well how few people would have the discipline to plan and save ahead.

Steve

[yorkshirelad1]

I have put money onto my Visa card knowing that I'm shortly about to pay for a large item (e.g. a flight) and it's been OK and all netted up OK at the following monthly statement date. I don't think the large item would have taken me over my credit limit, but I wanted the credit limit available for the rest of the month IYSWIM. I didn't (at the time) see any problems, and it worked well for me and I didn't get any complaints from the card provider. I don't do it very often, so it probably doesn't attract attention. I could probably increase the credit limit temporarily (have done that a couple of times), but that takes a little bit of doing, and is a bit more work.

[richfool]

I don't see a problem with the OP's plan, as long as he doesn't leave too large an amount on there for too long.

I have had refunds of purchases credited to my credit cards, after the monthly balance had been paid, thus leaving a credit balance until I use the card next, without incident or comment by the card provider.

[didds]

I don't think the large item would have taken me over my credit limit, but I wanted the credit limit available for the rest of the month IYSWIM.

But presumably if the credit limit isn't an issue and this is the overwhelming reason etc, one could have bought the tickets first, then when they show in the CC account, THEN pay that money into the a/c. That way one would never have a credit balance, just a slightly earlier part payment.