I have a credit card with a credit limit of $1000, but I would like to make a purchase of $1500. If I transfer $500 into my credit card account, would that increase my credit limit to $1500?
When in doubt, call (the card issuer) and ask. Ask if you overpay your current bill if the overpayment becomes available credit and tell them why you are asking. It can go either way.
For what it's worth, I made a payment that was well over what was due, and this is a snapshot of my balance. My credit line is $25,000, but since I overpaid, I can now charge $26,600 if I wish. This doesn't "answer" the question, as each card issuer has his own rules, and OP needs to ask. But, it proves that what he proposes is possible.
As the comment below notes, trying to charge $26,600 may (most likely) will not go through, a fraud alert would block it. But. I doubt if one does this with a $1000 credit limit card, pushing the available credit to $2000, that it would trip, or trip as fast.
To close this one - personal anecdotes only can suggest what 'might' be. To actually do this, call the card issuer, they'll be happy to answer the question.
I live in Canada and have a BMO mastercard. I called them and asked them and their answer was "of course!". I have put thousands of dollars on my mastercard from my bank account to pay for rare, large purchases. The money I put on appears differently on my online mastercard account though.
account balance: $6,000.00 CR
available credit: $3,000.00
This confused me at first, but when I called and asked them, they said my available credit doesn't change (ie: how much BMO lends me), but when I add my available credit + what I've put on my card (my account balance, which is CR (meaning my balance has a surplus of money)), then my spending limit is $9,000.00
So, I don't increase my "credit" limit, but I do increase my spending limit. It just comes down to terminology. I assume it is like this for other credit cards, but I would recommend calling and asking, just to be on the safe side.
No. You will need to call your credit card issuer and ask for a credit limit increase. If you plan to pay off your card then I see no problem in this.
You could also ask the seller if they will put $1000 on your card, and $500 in cash. (Ask for a cash discount too.)
Found some anecdotes!
I have an upcoming purchase that will be just over $2000, and recalled this question. I tried to pay $2000 more than my balance on my card, and this is the note I got back via email. Now, I did try to pay it directly to the card issuing bank. I don't (yet) know what they'd do if I made a payment via ACH through my own bank.
So for this type of situation, I'd suggest calling customer service and ask how they handle these. (Yes, the Joe was edited in. The rest is factual) I know this contradicts my older answer, but it serves as a counter-example. Not all banks handle the same.
I had a macys card which only had $75.00 credit limit... I accidently paid over the limit so the card had $100.00 in it. I left it that way for a month.. My credit limit turned into 100.. So I do think its possible to increase your credit limit that way.. I've tried many times requesting for a credit limit increase.. I was denied many times.. The only thing I have is to add money but the tricky thing is that you'll have to add money and spend the whole amount and then pay it off at once for the credit limit to stick. But since you have great credit assuming because your limit is 1000, you should request for an increase of your credit limit.
Overpaying a credit card to create a large positive balance may cause a bank to red flag your account. This is a technique used in fraud for check kiting (write or deposit a fraudulent check to overpay your credit card, then demand a refund on the balance overpaid before the check bounces.)
Every bank is different: Talk to your bank first before you try this. For a small balance ($5-20) overpayment isn't a big deal, it happens regularly... just spend down the balance. Past that, you might be harming your credit record or risk closing the account if the bank disagrees with how you are using an overpaid balance for a larger purchase, or you risk unwanted law enforcement attention aimed at your finances.
If you are trying to do this to build your creditworthiness, a secured card is better for this purpose. Disagree with your credit limit? Deposit more in the holding account.