10

I want to make a large purchase at a retail store to the sum of $10,000 but the credit limit on my card is set at $2000.

If I send $10K to my credit card will the purchase be allowed to go through? Not sure if the credit limit is a hard limit or not?

I don't want to be left embarrassed if my card is declined in the store lol.

I called my bank but the answer they gave wasn't too convincing. It was kind of "Errr yes i think its OK!"

Does any one know first hand?

  • What country are you located in? – THEAO Dec 13 '13 at 11:53
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    I'm based in Hong Kong – atp03 Dec 13 '13 at 12:04
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    "Call/visit the bank issuing the card" is the olny correct answer. THEAO's bank doesn't permit this. Mine does. The only thing that matters is if your bank does. – JoeTaxpayer Dec 13 '13 at 12:26
  • I have done that before without an issue but you should ask your card issuer to be 100% sure. – Bel Dec 16 '13 at 6:11
  • After being told by the call centre that it was OK to prepay, my cheque was rejected (due to an obscure reason) and several other attempts to prepay into my credit card I eventually took the money out in hard cash and made the purchase. Thanks for all your input. – atp03 Feb 12 '14 at 15:13
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If your bank says 'yes' you are set. If not, a suggestion -

Ask if the store offers "lawaway." This means that you put a deposit to hold the item, and make small payments until it's paid in full. You can charge the $2000, pay the card immediately, and do this say, once a week, until you've paid the full amount.

If the store wants to make the sale, this is a way to make it happen without them negotiating price. And if your card reward is high enough, the multiple visits might be worth it. (My card gives 2% cash back, so the $200 reward might prompt me to stop 4 extra times if it's not out of the way.)

  • Great suggestion. – atp03 Dec 14 '13 at 8:56
  • @user1133619 - Thanks - let us know what you find from the bank and the store. Curious on the outcome. – JoeTaxpayer Dec 14 '13 at 15:55
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Is there a reason that you only want to do the transaction with the credit card?

A certified check or even a personal check (perhaps with a waiting period for it to clear) may be acceptable to the store. You should ask and make arrangements in advance. The store should be willing to discuss the payment methods in advance for such a sale. Maybe they even take direct bank transfers or Paypal.

Also, have you tried just calling the credit card and asking for an increase in the credit limit? If you are responsible enough to have $10k in the bank then you probably also have a good history with the credit card which warrants a higher credit limit.

  • For some transactions (buying a car) the seller will not accept a credit card, and a check will be the only way to do it. It would also be critical if the seller was a private individual. – mhoran_psprep Dec 15 '13 at 12:57
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In Hong Kong, usually you can "prepay" your credit card.

Just make a payment in advance and the amount will added to your credit limit after about 2 working days. (Call the card centre if you want the limit to be raised immediately.)

This is how college students here (including myself) settled their HK$20,000+ tuition fee with a credit card and get reward.

  • +1 Welcome to Money.SE. It's great to have members from all over the world, I hope you visit again. – JoeTaxpayer Feb 12 '14 at 15:05
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Disclaimer: the only cards I have are Visas.

When I have tried this for buying expensive items like plane tickets, this was not allowed. (I really wanted to take advantage of the extra rewards for so much more spending!)

Also, sometimes when I have tried to overpay, the various banks will not take more than an outstanding balance. What I mean is say I owed $155.55 in charges to my card for a given month, I wanted to pay $200. None of my banks have allowed that.

Perhaps your bank is different, or the system in your country would allow that. I haven't had any luck with it in the US though.

  • That sucks - Any ideas on how i go about making this purchase? It's an upmarket store and don't want to be thought of as a drug dealer paying in cash lol. Will visit the bank to see how they can help. – atp03 Dec 13 '13 at 12:16
  • Do you have a bank account with a debit card? If you already have the funds and it's just a question of access, then a debit card may work. If this were in the US you would also want to speak with your bank beforehand to make sure that you pre-authorized spending of that level if you don't usually do it. Otherwise you would get flagged as a potentially fraudulent transaction, which still results in the same embarassment. – THEAO Dec 13 '13 at 13:01
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    I'm easily able to overpay, and regularly do so. However, like THEAO, I'm not allowed to charge more than my credit limit. That is, overpaying does not help. – ChrisInEdmonton Dec 13 '13 at 15:16
  • I've hit this even more severely--the intended purchase was over 98% of my credit limit which meant I had to pay off even the current charges. The website wouldn't let me enter a manual payment of more than the current bill, although I did get a human to process a transaction that covered the stuff that wasn't yet on the bill. – Loren Pechtel Feb 13 '14 at 2:50
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It depends on your card issuer.

With American Express (UK), I've had no problems overpaying, then putting through a charge for positive balance + most of credit limit. I actually rang them up to ask the first time I wanted to do this, and they confirmed it was fine, but warned me that their website would only report an "available credit" of the credit limit, not including the positive balance too.

On another card, I normally round up my monthly payment, so at the start of the month I'm normally a few pounds in credit. When I log into the online service for that card, it shows the credit limit as normal, and an available credit of credit limit + positive balance. However, when I asked the card issuer about putting a noticeable amount of overpayment onto the card for a big purchase, they said that it wasn't allowed and they'd reserve the right to close my card down if it I did it, and it wasn't something they normally allowed.

So, I think you best bet is to ring your card issuer up and ask them. If they give you the nod, overpay a few pounds/dollars/euros/etc, then check your available balance & credit. If it hasn't gone up, ring to check, then when that's sorted make the large overpayment and finally use the card!

0

No, it potentially doesn't work, even if the bank's hotline claims so. And then you are busted, because your money will be stuck in the credit card (it takes '4 to 6 weeks to process a reimbursement check').

I tried it myself, and their hotline explicitly recommended that approach, but the card still declined the charge [This was Bank of America]. Then they recommended to apply for a temporary limit increase, which was declined, but made sure that I couldn't get a higher-limit credit card at another bank.
So be very careful.

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In the United States generally no, the bank will not accept your payment if it is over the current balance. They are even able to "adjust" your checks to take less than the written amount.

It may help you to note that the credit limits can generally be exceeded without penalty as long as you repay down to the credit limit by the end of the reporting limit. For Visa/Chase, their polity is 10%-15%, call first before attempting this.

  • Over decades I've had cards from at least a score banks in the US, I've always rounded up my payments (usually to multiple of $100) for convenient arithmetic, and I've never had that refused, "adjusted" or even mentioned. On a few occasions when I didn't happen to spend down the overpayment for 3 or 4 months, they did mail me a refund check for the remainder. – dave_thompson_085 Jan 31 '15 at 3:43

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