Question on purchases using credit card

Anonymous · ‎12-20-2012

Hi,

I am a foreign national studying in the US, and recently met a problem of purchasing using credit card, which is different from my experience back in my home country.

I have a credit card with $5,000 credit line, and I'd like to buy a gift of $6,000. So I deposited $1,500 to the card, and thought that 5000+1500=6500 would be sufficient for my purchase. But the card was rejected in the transaction. I called the bank issuing the credit card and was told that the money in the balance cannot be used unless I increase my credit line to make it available.

This is contrary to my previous experience of using credit card in my home country: credit cards can be used as debit cards and we can buy things above the credit line as long as we have enough balance in the credit card account. I remember that I used to buy a $1,300 plane ticket with a credit card of $1,000 credit line (I made an additional $1,000 deposits beforehand).

So I wonder if it is just the card (BOA cash rewards card) I applied has such limits, or all the credit cards in US follow such rules.

Thanks for your patience for reading this silly question!

cashnocredit · ‎12-20-2012

Issuers are allowed to do this but most don't. I suspect some of this is anti-fraud related. You see this also in limits some banks impose on prepaying or multiple prepaying.

Visa signature and MC world cards are designed for this and provide increased flexibility - you just have to pay the over-limit amount after the statement cuts.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k

bettercreditguy1 · ‎12-21-2012

+1. Most cc companies here charge an "over the credit limit fee" if they do approve a charge above your limit.

Updated scores 3/7/21 TU 849, EQ 829, Ex 818 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience

bs6054 · ‎12-21-2012

@bettercreditguy1 wrote:
+1. Most cc companies here charge an "over the credit limit fee" if they do approve a charge above your limit.

I think the OPs plan was not to be over the limit. I believe this fee should only be charged if (at any stage in the billing cycle) the amount owed is over the limit and it this case, with a $1500 "credit" it wouldn't be.

When I overpay my Amex revolver (by mistake!) I see the available credit is above my credit limit, but haven't seen that on other cards.