Lodging money into credit card account

[Mag2006]

Guys I know this is a question that has most likely being asked before but I'm sorry to be a pain but have a question.
Say ones credit limit is €6k, can one lodge €2k into it (bill is currently cleared) and would that mean you could use the card for transactions up the the value of €8k or will it just be posted as a payment on account by the bank??.

Many thanks in advance.

 

[CCOVICH]

If the balance on the account is zero, then yes, you would have €8,000 in credit.

 

[Satanta]

Say ones credit limit is €6k, can one lodge €2k into it (bill is currently cleared) and would that mean you could use the card for transactions up the the value of €8k

The credit limit is the amount your card can go into debt (the level of credit provided).

If your card is in a positive position before the purchase you still have the 6k credit available, so yes you can make a 8k purchase by preloading it from €0 to €2000.

Do be careful with timing. It can take up to 24 hours for funds to clear even in the same bank (usually goes a lot faster, if you deposit this evening it should be there tonight).
I believe on doing this before the bank did query the unusal transaction with the card holder, but just a matter of checking the card wasn't stolen etc.

If your in a hurry with the purchase a temporary increase on the CC limit (can be set for a month or a couple of months) may be faster than the cash transfer, but could lead to further debt so do clear it asap.

 

[Mag2006]

We are going on holiday on the 26th so I just want to make sure all funds to keep a family of 4 going are in order and hiding my cc until the 26th so we will use that for the 10 days of the holiday.
Thanks a million,that is a relief to know. Going to ring the bank to tell them what I am doing though so there is no transactions declined if I hit €6k when I know there is €8k.

 

[Satanta]

Going to ring the bank to tell them what I am doing though so there is no transactions declined if I hit €6k when I know there is €8k.

In our case the preloading above the credit limit was for a single purchase so was an unusual transaction (although it was a student CC at the time with a CL of approx €1000 or so for a purchase of €3000 - approximate figures as a few years back).

Shouldn't see individual small spends adding up causing for a verification call, but no harm in mentioning it in advance. For your own safety on a holiday I'd suggest not raising the limit (additional chances of card theft etc.) but if you feel you may need it it can be an option.

Please remember, there isn't 8k there. You have the option of 6k credit, this is a debt the same as a loan (at higher rates than a loan, if you won't be able to pay back in a month or two you should seek a loan for this amount and not put it on the CC). A credit limit is not a target! It's a maximium amount!

 

[ClubMan]

We are going on holiday on the 26th so I just want to make sure all funds to keep a family of 4 going are in order and hiding my cc until the 26th so we will use that for the 10 days of the holiday.

Bear in mind that if you lodge, say, €2K with the intention of using this for cash withdrawals (not advances) then any other transactions on the card (e.g. meals, accommodation etc.) will eat into this cash balance assuming that the retailers post the transactions fairly promptly.

 

[Guest111]

Also I'm pretty sure your 2K is not covered if the card is stolen and used. This is quite significant.
I'd a slightly amusing incident recently with MBNA...I was in New York trying to buy a necklace with my credit card which kept getting declined. Ended up paying cash which was annoying. Contacted MBNA who told me they had frozen the card for security reasons as the last two transactions were suspicious as they were in hotels in Kilkenny on the Monday and New York on the Wednesday. They then asked if in future I could inform them when I was going away to avoid confusion! Like being fecking married...

 

[Satanta]

Bear in mind that if you lodge, say, €2K with the intention of using this for cash withdrawals (not advances) then any other transactions on the card (e.g. meals, accommodation etc.) will eat into this cash balance assuming that the retailers post the transactions fairly promptly.

Mag, just for clarity as you may not be aware.....
If you use your CC for cash withdrawals (similiar to an ATM card) you recieve quite good x-change rates on the cash and fairly low fees (depending on the exact card). If your CC is in the red (in debt), you pay a cash advance fee on these straight away from the day you withdraw the money.

If your card is pre-loaded and in credit you don't pay the cash advance fee as it's withdrawing your own cash not loaned cash.

The main flaw is (as already mentioned) if your card is stolen the pre-loaded cash is not covered.

I'm not sure this was an issue or concern, I think you were just looking for a way to finance the holiday and may never have considered this. Just wanted to break CMs advise (and ADs) into smaller chunks incase the OP had never come across the issues before.