Question about Credit Limit and Prepaying

[Anonymous]

Hi,

I have a question about credit limits.  I have a credit limit of 3,000 but will be making a large car purchase of $20,000 and I want to get rewards for all of that money rather than just paying with check.  I know that I cannot normally put over $3,000 on my credit card, but what if I prepay (like I was paying my bill) $17,000.  Will that allow me to make a purchase that big on the card?   

If my question is confusing, let me know and I will try to clarify.

[chopperacn]

If what I infer is correct, you want to pre pay $17k to a card which has 3k limit?

I tried with Chase long ago and it didnt work out .You will get rewards only upto your CL.This is what the CSR told me but it was some 4 years ago.May be it works now.

I would suggest call the CCC and ask 'em.

[Anonymous]

You are correct - I see your point about how they might only give rewards up to the credit limit - that would suck.

[Uborrow-Upay]

Hi, driege!  Welcome to the forum!

Some banks have rewards programs for debit cards (Wachovia, for example).  Rather than paying by check, use your debit card if you get rewards for it.  The money's still coming from the same place.

Good luck with your new wheels!

[Watchmann]

Car dealers won't let you charge a car on a card as they don't want to pay transaction fees for a large amount.  You are better off in negotiating the best price you can, that can easily add up to more dollars than most rewards programs.  Don't be a slave to a Rewards Program.

[Anonymous]

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@Anonymous wrote:

Hi,

I have a question about credit limits.  I have a credit limit of 3,000 but will be making a large car purchase of $20,000 and I want to get rewards for all of that money rather than just paying with check.  I know that I cannot normally put over $3,000 on my credit card, but what if I prepay (like I was paying my bill) $17,000.  Will that allow me to make a purchase that big on the card?   

If my question is confusing, let me know and I will try to clarify.

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1.  Most CCC's will not accept such an over payment.

2.  Most CCC's will not authorize a charge over the CL, even with prepayment.  It will act more like a debit card with daily purchase limits.  Once the charge posts, your balance would show the new reduced negative balance, but you can't increase your CL by applying "prepaid" deposits against a CC, generally speaking.

3.  Your rewards will apply to authorized charges only....see point 2 above.

4.  You could actually spook your CCC with such a payment and get some type of AA.

Here is a better idea.  If you have cash for the car, just negotiate a better price.  Get a 1,2,3 percent discount.  The dealer is much more likely to do this for cash than a CC.  CC's cost the merchant/dealer a discount of 1-3%.

Look for a car with the best incentives, rebates, warranties and dealer discounts.  This will provide a better bottom line result to you than trying to conjure up a reward cc purchase.

Use the reward card for the gas, insurance premiums, maintenance, tires, etc. for your card rewards.

Message Edited by txjohn on 07-14-2009 09:35 AM