topic Re: Why can't you pay more than your balance with some CC companies? in Credit Cards

Why can't you pay more than your balance with some CC companies?

cr101 — Fri, 08 Nov 2019 03:46:31 GMT

Discover doesn't allow you to pay more than your balance, and some of my other CC companies put a max on the amount that you can go over.

Re: Why can't you pay more than your balance with some CC companies?

FinStar — Fri, 08 Nov 2019 04:13:33 GMT

Some lenders have specific internal rules so as not to create negative balance conditions, but that's usually by using their payment portal. There's a few that do let you do so, but only a specific amount over the current balance. However, you can still pay any amount over your balance by pushing the payment through your bank's bill pay.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Fri, 08 Nov 2019 04:14:43 GMT

Because they don't want people to pay past their limit to try to game the card.

Lenders set the credit limit they believe you should have and don't want you to go beyond that limit (with a few exceptions like charge cards and AMEX cards in general). If you have a $500 limit, they don't want you paying $2500 so you can go make a $2500 purchase to cycle the rewards on.

In some cases it seems like it's a way they protect their customers from accidentally overpaying but a lot of it seems to be more to prevent rewards abuse.

Re: Why can't you pay more than your balance with some CC companies?

ChargedUp — Fri, 08 Nov 2019 04:38:52 GMT

I see the point, but sometimes it's annoying when I'm trying to cover a pending charge before a statement cuts. Discover and Cap One wouln't let me do it. Chase and Amex don't seem to have a problem with it.

Re: Why can't you pay more than your balance with some CC companies?

cr101 — Fri, 08 Nov 2019 05:42:06 GMT

@ChargedUp wrote:
I see the point, but sometimes it's annoying when I'm trying to cover a pending charge before a statement cuts. Discover and Cap One wouln't let me do it. Chase and Amex don't seem to have a problem with it.

This is exaaactly what I'm trying to do. Plus, it's a very low-limit card w only $200. They also have a weird notice that says that multiple payments within 6 or so days of one another may take longer to post. Weird. Just take my money! LOL

@saeren: hmm. good point. i never thought about that.

@finstar, nice tip! i'm going to try this.

Re: Why can't you pay more than your balance with some CC companies?

omgitsMatt — Fri, 08 Nov 2019 14:09:24 GMT

@ChargedUp wrote:
I see the point, but sometimes it's annoying when I'm trying to cover a pending charge before a statement cuts. Discover and Cap One wouln't let me do it. Chase and Amex don't seem to have a problem with it.

Bill pay is the way to go then.

I use my bank to bill pay it, then it clears the day of or day before the pending charge posts.

Cap1 works for sure

I bet Disco does too

Re: Why can't you pay more than your balance with some CC companies?

gdale6 — Fri, 08 Nov 2019 14:25:16 GMT

Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.

Re: Why can't you pay more than your balance with some CC companies?

HeavenOhio — Fri, 08 Nov 2019 14:50:24 GMT

@ChargedUp wrote:
I see the point, but sometimes it's annoying when I'm trying to cover a pending charge before a statement cuts. Discover and Cap One wouln't let me do it. Chase and Amex don't seem to have a problem with it.

Capital One will let you pay 10% over your current balance. That may or may not be enough to cover pending charges.

I believe AMEX will actually go so far as to increase your available credit beyond the limit if you overpay.

The billpay (push) method won't work with Apple Card.

Re: Why can't you pay more than your balance with some CC companies?

Aim_High — Fri, 08 Nov 2019 16:39:17 GMT

@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.

I'm pretty sure this is the reason, pure and simple.

No schemes to prevent you from using a higher credit line for rewards.

No schemes to try to rig your credit line from higher purchases.

I've run into this with numerous cards over the years, rewards or not.

Some are more strict with it than others.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Fri, 08 Nov 2019 18:55:38 GMT

@Aim_High wrote:
@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.
+1
I'm pretty sure this is the reason, pure and simple.
No schemes to prevent you from using a higher credit line for rewards.
No schemes to try to rig your credit line from higher purchases.
I've run into this with numerous cards over the years, rewards or not.
Some are more strict with it than others.

Maybe, but as mentioned, this doesn't prevent me pushing large amounts from a bank, creating a credit balance.

Also, in my limited experience (3 years as a ML for a South American cartel) this isn't a great technique for laundering. The money is coming from an identified bank account to an identified credit card with all the trail in place. So not convinced!

I would guess banks don't want to have to go to the trouble to refund balances, and so preventing you creating one from their web interface is worthwhile, and hopefully the number pushing will be small. (Whereas if it was anti-ML, launderers will continue to push!)

Re: Why can't you pay more than your balance with some CC companies?

wasCB14 — Fri, 08 Nov 2019 19:42:08 GMT

@Anonymous wrote:
@Aim_High wrote:
@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.
+1
I'm pretty sure this is the reason, pure and simple.
No schemes to prevent you from using a higher credit line for rewards.
No schemes to try to rig your credit line from higher purchases.
I've run into this with numerous cards over the years, rewards or not.
Some are more strict with it than others.
Maybe, but as mentioned, this doesn't prevent me pushing large amounts from a bank, creating a credit balance.

Also, in my limited experience (3 years as a ML for a South American cartel) this isn't a great technique for laundering. The money is coming from an identified bank account to an identified credit card with all the trail in place. So not convinced!

I would guess banks don't want to have to go to the trouble to refund balances, and so preventing you creating one from their web interface is worthwhile, and hopefully the number pushing will be small. (Whereas if it was anti-ML, launderers will continue to push!)

At a conference a few years ago (blending law enforcement with forensic accounting topics), two Treasury Department representatives said the South Americans were mostly using shipping containers to move cash (cash buried amongst a lot of junk that would be hard to sort through), or having the South American wing "sell" vastly overpriced goods to their associates in America. One example the Treasury had caught on to was "scrap jewelry" sold for way above market...nearly the price of gold bullion.

Re: Why can't you pay more than your balance with some CC companies?

budugu — Fri, 08 Nov 2019 21:53:03 GMT

@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.

^ this. Any one can pay your credit card. The surplus is sent to the owner of the card. so it not hard to figure out how to pay card holder. Companies that have better systems are more laxed than others i.e. know the accounts where the payment is coming from etc. Lot of payment systems are completely detached from the issuing bank.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Fri, 08 Nov 2019 21:57:16 GMT

@budugu wrote:
@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.
^ this. Any one can pay your credit card. The surplus is sent to the owner of the card. so it not hard to figure out how to pay card holder. Companies that have better systems are more laxed than others i.e. know the accounts where the payment is coming from etc. Lot of payment systems are completely detached from the issuing bank.

But again, anyone can pay by pushing from another bank account, so this is no real safeguard.

Re: Why can't you pay more than your balance with some CC companies?

wasCB14 — Fri, 08 Nov 2019 22:18:03 GMT

@Anonymous wrote:
@budugu wrote:
@gdale6 wrote:
Its also an anti money laundering thing, they are required to refund any credit balance that may go past 90 days.
^ this. Any one can pay your credit card. The surplus is sent to the owner of the card. so it not hard to figure out how to pay card holder. Companies that have better systems are more laxed than others i.e. know the accounts where the payment is coming from etc. Lot of payment systems are completely detached from the issuing bank.
But again, anyone can pay by pushing from another bank account, so this is no real safeguard.

FWIW...

I recall using an Amex card Offer to buy merchandise that was shipped to my mother (who was not an additional card member). I pulled a payment for the net-of-discount amount from her checking account. She later returned the goods to the merchant as they had been incorrectly described, and the transaction was refunded to my card. Amex had no difficulty in refunding the credit balance to her checking account.

Re: Why can't you pay more than your balance with some CC companies?

ChargedUp — Sat, 09 Nov 2019 02:38:59 GMT

I've heard of the drug cartels using pre-paid debit cards to move large amounts of money, but doing so by creating a negative balance on a wholly traceable credit card is a new one to me.

Re: Why can't you pay more than your balance with some CC companies?

cr101 — Sat, 09 Nov 2019 02:59:23 GMT

@ChargedUp wrote:
I've heard of the drug cartels using pre-paid debit cards to move large amounts of money, but doing so by creating a negative balance on a wholly traceable credit card is a new one to me.

This entire thread is making me realize how my banking activity looks so shady.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Sat, 09 Nov 2019 03:00:11 GMT

Banks don't like negative balances on debit cards and don't like negative balances on credit cards. If you pay $1,000 to obtain a $1,000 credit balance on your credit card, you card becomes a debit card for that $1,000. What if a cardholder gets close to 0 on their card and pays another $1,000, keeping the card working like a debit card? And if you had a debit card with that same bank and they allowed you to overdraw as often as you wish, it becomes a credit card, even if you have funds available on your credit card to cover it. And there may be language in the CARD act prohibiting such practices.

I think they want to keep their products working as intended, however allow occasional negative balances. Debit cards have overdraft protection to fix negative balances and credit cards will produce refunds of credit balances that remain on the account too long.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Sat, 09 Nov 2019 03:55:19 GMT

Remember that there are two different things, balance on the credit card account, and available credit. Many issuers do not increase the available credit, so, even if you have overpaid the previous month creating a $2000 balance say, your available credit won't be usual limit + $2000.

Re: Why can't you pay more than your balance with some CC companies?

Aim_High — Sat, 09 Nov 2019 17:21:25 GMT

@cr101 wrote:
This entire thread is making me realize how my banking activity looks so shady.

Yes, banks do pay attention and things that we may think are innocent may raise flags and set off alarm bells with some banks. I've heard paying an account from a bunch of different external banks can raise suspicion. Also, unusual spending patterns. We may not realize it but they are watching us more carefully than we can imagine.

Re: Why can't you pay more than your balance with some CC companies?

Anonymous — Sat, 09 Nov 2019 17:45:08 GMT

@Aim_High wrote:
@cr101 wrote:
This entire thread is making me realize how my banking activity looks so shady.
Yes, banks do pay attention and things that we may think are innocent may raise flags and set off alarm bells with some banks. I've heard paying an account from a bunch of different external banks can raise suspicion. Also, unusual spending patterns. We may not realize it but they are watching us more carefully than we can imagine.

Years ago, and without even thinking, and trying to pay someone quickly, I thought I'd just add a coworker account as an external account and "direct deposit" the money into his account using the numbers on his check. After doing it, I realized that it would fail because my name was not on his account.

Not only did it fail, the bank shut down my external transfers for the life of the account. So I switched banks. Now 10 years later, I switched back. Tried to set up external transfers and the website said my new account was restricted from using external transfers. I called the bank, explained what happened and that it was a mistake 10 years ago, and they said they would review it. Called me back 20 min later to tell me the restriction was lifted.