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Some mates and I have the amount to cover the cost of an item but have a credit limit lower then the price. The purchase has a hard requirement that the payment method is a credit card. So, my mates and I put a negative balance on the card (I.E: The balance is 0 and then we pay something like 16,000 on it, making the balance -16,000 so we can make the large purchase putting the -16,000 balance back to 0).

Could we make the purchase using this method?

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    You may want to add a country tag, in case anyone has information that's specific to a given banking system. – dwizum Dec 27 '19 at 20:08
  • quite unlikely as the purchase limits are based on your available balance but up to the limit of the card – GµårÐïåñ Dec 27 '19 at 20:13
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    If you and your mates have credit cards who's total available credit is 16,000 then you can have the merchant split the payment across the multiple cards. Or... deposit the 16,000 into one bank account and pay for it using a debit card. – RonJohn Dec 27 '19 at 20:13
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    The credit card almost always has "negative" ballance (that's how the credit cards work, after all). What you try to accomplish is to make the ballance POSITIVE. I did so once and it worked, but be sure to ask your issuer first. It may or may not work and if it doesn't, you may have hard time getting your money back without a significant loss. – fraxinus Dec 28 '19 at 8:20
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    @fraxinus My card has no monthly/yearly charges, it's free. I use it because it has very low-fee ATM withdrawals worldwide and is free to swipe worldwide. I also happen to keep it around because I have very little other debt to my name and is useful to create a credit history. – stan Dec 28 '19 at 18:54
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Ultimately, in order to answer this, you need to check your cardholder's agreement, and/or call your issuing bank and ask them. Card behaviors around credit balances and purchases larger than your limit will vary from bank to bank.

Most banks will be happy to let you carry a credit balance (after all, that's essentially you lending them cash for free), but by regulation they are required to make a good-faith effort to refund your money within 6 months. Few banks will take action before that limit without you prompting them to (i.e. explicitly asking for a refund). However, it sounds like you plan on implementing this "immediately" before making your transaction.

You may run into issues with this, as some issuers implement a rule that says that no single transaction can be equal to or larger than the credit limit on the card - even if you have a credit balance, you can never charge more than the limit. However, other banks are totally happy allowing that to happen if you have a credit balance large enough to keep the balance under the limit.

So - call your bank and ask. Or, ask the merchant if you can split the transaction into several smaller ones. Or, call your bank and ask for a higher credit limit.

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    In contrast, when I try to pay my card to zero, my US bank rejects the payment as “more than the balance.” I have to pay the exact balance or less, and then they compute and add the interest I wanted to pay. – WGroleau Dec 28 '19 at 16:40
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    "Ask your bank" is the only correct answer. I have cards from different issuers with different rules even without the variation in laws from place to place. – chrylis -cautiouslyoptimistic- Dec 28 '19 at 22:28
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    @WGroleau not sure I understand. Does your bank force you to carry a balance that you then have to pay interest on? – jcm Dec 30 '19 at 12:39
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    No, I can pay the balance any time. But they won’t let me pay more than the balance. After I pay, they compute and charge the interest. So the only way to get it to zero is to pay the balance and then make another payment for the interest. The point is that unlike “most banks” in the answer, I cannot overpay. So it’s good dwizum didn’t say “all.” – WGroleau Dec 30 '19 at 16:20
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    Be careful about asking a merchant to split a transaction into multiple, smaller transactions. This can be a violation of laws that prohibit "structuring" (deliberately making multiple smaller transactions to avoid triggering a legal reporting requirement). Make sure you aren't inadvertently breaking such laws. – Monty Harder Dec 30 '19 at 19:59
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Most credit cards (at least here in the US) do have the concept of temporarily raising a credit limit for a purchase. It's always by request, and there's no guarantee of approval, so you would have to try and see. If the amount is grossly different from your current limit it will probably be a challenge unless your credit score and income have dramatically improved since they put your limit in place.

If you can't get a limit increase, then as Aganju suggested, finding a friend or family member with a high enough limit and giving them the money is probably a good bet.

I know I'd be happy to earn cash back for such a large fully-reimbursed purchase.


One other thing I want to add. This purchase sounds.. somewhat sketchy.

What merchant would pay credit processing fees on a high amount when a buyer is willing to pay cash/bank transfer?

What merchant would be willing to accept a single credit card payment for such a high amount but not allow splitting among several cards (the per-transaction fixed fee would be negligible at high dollar amounts where the percentage-based fees would make up the bulk).

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    +1 for the sketchy part. Don't quite understand the "hard requirement" for a credit card payment. – jcaron Dec 29 '19 at 1:12
  • Credit card seems to me like one of the least sketchy ways to require payment. – stannius Dec 29 '19 at 13:36
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    It's likely that a debit card would also actually be accepted, but that the merchant/vendor is being lax with their terminology and/or don't quite grok their own payment system. IME they usually mean "you can't post us a cheque or cash, or make a bank transfer, to pay for this item" (which is totally reasonable) – Lightness Races in Orbit Dec 29 '19 at 15:30
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    @LightnessRaceswithMonica debit cards might also have a hard cap on transactions. I ran into that once when younger and not having any credit at all, and ended up having to spread orders for the parts to build a new computer out over several days because my bank had no ability to raise the $500(?) cap on debit transactions. – Dan Is Fiddling By Firelight Dec 29 '19 at 22:18
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    @WGroleau I understand that for a “small” online purchase of a few hundred $, options are usually limited (though “credit card” would probably include most debit cards nowadays). But we’re talking $16000 here, I don’t know many merchants who wouldn’t be quite ready to accept other options in this case even if it means a bit of “manual” work... – jcaron Dec 30 '19 at 17:35
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Typically, that does not work. Calling the bank might give you different info, but there is a risk that it won't work, even though the bank explicitly confirms it (happened to me, BoA). At the end, the original credit limit of the card applies, even if you overpay it with a million.

You can try to call and ask for a limit increase, even only temporarily; the risk with that is that your credit score might probably go down, and it might get declined, so you end up worse than before.

Also, once you transfer the money onto the credit card, it takes a lot longer to get it back. The official claim is typically '4-6 weeks', but it might work in 10 days if you are lucky.

My solution was to take out cash and hand it to a (personally and well-known!) friend, who had enough limit on her credit card and made the booking for me. The bank impressed only by being extraordinary disinformed, self-contradicting, helpless, and counterproductive.

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In contrast to @ChrisInEdmonton's credit card, my credit* card does allow such charging. It does have additional spending limits per purchase/per day etc, so I'd probably have to ask my bank to raise the limits for the foreseen transaction.

* I'm in Germany, and my credit card (like many credit cards over here) look from the outside (e.g. the store where I do a purchase) like a credit card but internally work mostly like a debit card with a comparatively small credit.

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As others have said, it depends a lot on the card issuer (and country), and by experience, it can vary with time as well.

I used to put a very large credit balance on one of the Amex cards I had, in order to have the ability to pay amounts much larger than the credit limit on that card (I wanted to use that specific card for some miles-related reason I don't remember).

This worked very well for months, until one day when I was at the other end of the world they called me to tell me they couldn't accept that any longer, and they immediately refunded the credit. Which was quite annoying as I suddenly couldn't pay some large bill exceeding the limit with that card.

As far as I understand it, Amex have made explicit changes to their T&Cs for at least some cards to make it clear they don't want you do to that (they may even reject payments that would make your balance go into credit).

Your best option is to see if you can pay the amount through other means. Most merchants would actually much, much prefer a bank transfer over a credit card payment any day of the week for such an amount: credit card fees for $16000 are usually several hundred dollars. Also, a credit card payment is much more likely to get a "chargeback" (cancellation/dispute) than a bank transfer.

Your next best option is to call the card issuer to ask whether they can either increase your limit or accept an overpayment AND that overpayment would actually add to your total limit.

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    I've seen this on a UK-issued amex as well. An acquaintance of mine overpaid by several multiples of his limit in order to buy something expensive; within a few hours Amex had refunded the money and closed the account. – Calchas Dec 29 '19 at 10:57
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I'm not really clear why you don't just use a Visa Debit card for this purchase? I use Visa Debit for expensive purchases like long-haul international flights, hotels and health spas or whatever. It's really easy - I just transfer $12k or so into that account and then start spending. You can just put your $16k onto a Debit card and pay that way.

There are no monthly fees, and best of all, it is still backed by Visa just like a credit card. What I mean by that is, recently I was travelling around Europe and a dodgy vendor charged my card for 200 Euros that I didn't spend. The vendor didn't respond to my emails, so I complained to Visa and they reversed the payment. So you're just as safe using a Visa Debit as a credit card, and I never get stuck paying interest or late fees because I never owe Visa money. Debit cards are the best - I haven't owned a credit card in years.

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    This is locale specific. In other places different rules apply for credit and debit cards. In particular, in the UK, the consumer protection law around credit cards is significantly stronger than around debit cards. – Calchas Dec 29 '19 at 10:52
  • What Calchas said. I'm in the UK. I only actually ever use a debit card except for large purchases that I can't afford and shouldn't be making (hehe), but I should really be using my credit card for everything, because the protection laws are wildly, wildly, wildly stronger for credit than for debit. So be careful of the claims/assertions in this answer. That being said, I bet the merchant does accept debit contrary to their claims (a lot of US merchants, IME, don't make a distinction, because debit seems to be rare there?) – Lightness Races in Orbit Dec 29 '19 at 15:34
  • I'm living in NZ at the moment, but from my understanding, Visa's United States team handled the reversal of the scam vendor's transaction and the T&Cs, rules etc are American. I've been using Visa's Debit card for years and it's accepted everywhere that a credit card is, but the only downside is that Debit cards don't improve your credit score (since I'm only using my own money, never credit). – Only_me Dec 29 '19 at 19:20
  • Here's what it says about Visa Debit's consumer protection: "You'll be protected against unauthorised use of your card or account details with Visa's Zero Liability policy." – Only_me Dec 29 '19 at 19:32
  • @Only_me That's not the same as UK consumer protection, which makes the card company liable (with the supplier) for non-performance of contract, defective goods, etc. But that protection starts at £100 on a credit card and isn't available for debit card transactions. – Andrew Leach Dec 30 '19 at 0:05
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Probably not. It may depend on your credit card, but I know for sure my credit card doesn't allow this. If you have a credit limit of $10,000, your credit card may not allow you to make a purchase greater than $10,000, even if you've prepaid several thousand in advance.

What you may be able to do instead is to pay for the item over several days. That worked for me.

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  • Unfortunately it has to be in one purchase and can't be paid in payments. Would it be possible to make that payment, then immediately pay off that balance, literally within minutes and make another purchase within those minutes and then immediately pay that off. Would that work? – x7309wh Dec 27 '19 at 19:59
  • @user92730 - it's hard to know if something like that would work without knowing a lot of details (which you may not have) about how the transactions and payments are processed. For example, "pay off that balance" can mean different things and that payment may clear in seconds or it may take several days. Similarly, the purchases may just hit as authorizations and may not complete immediately, and your issuer may or may not include them in their calculations. – dwizum Dec 27 '19 at 20:07
  • @user92730 the UK might be different, but in the US it takes a day for a payment from Bank A to be credited to a card at Bank B. (Unless the card and checking account -- or whatever you call it over there-- are at the same bank. Then it's instantaneous.) – RonJohn Dec 27 '19 at 20:10
  • Im located in the US so that was helpful @RonJohn. So to make this work we can split that up. Thank you everyone – x7309wh Dec 27 '19 at 20:16
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You can possibly find a prepaid credit card. This is a card (in the USA, generally Visa or MasterCard) which looks to the merchant like a credit card, but from your viewpoint is one where you deposit money in advance, and any charges are debited against your existing credit. I have never used one, but if they work logically you should be able to deposit 16,000 of whatever currency you use, then charge that amount. Here's one list of potential vendors: https://usa.visa.com/pay-with-visa/find-card/get-prepaid-card

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It seems that it depends by bank.

In Argentina, I can overpay or "charge" my credit card.

If you go to Visa Home page, there is an option "Balance status" (or so).

There you can see Available to make purchases: XXX, Available to make purchases in installments: YYY

When I tried this, the only amount that increased was the first one, i.e the amount that you can use to make a payment in one payment only (no installments).

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