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

[cr101]

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.

[FinStar]

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.

[Anonymous]

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. 

[ChargedUp]

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.

[cr101]

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@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.

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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.

[omgitsMatt]

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@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.

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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

[gdale6]

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

[HeavenOhio]

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@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.

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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.

[Aim_High]

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

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+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.

[longtimelurker]

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@Aim_High wrote:

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

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+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.

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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!)