Why does Amex let you overpay sometimes but not others?

[SRT4kid93]

When I first got my BCP I prepared/overpaid by $1000 and it was fine. Ever since it won't let me over pay. 

I just tried to over pay again just to see and it wouldn't let me, but then I tried to over pay my gold card by $1000 and it was going to let the payment go through. 

I know over paying can be a sign of money laundering, so is there a limit where you can only over pay 1 payment per cycle or something?

[1lifeisworthit]

My Cap One cards always let me overpay by 10%.

No other card that I have has ever let me pay more than my current (full) balance.

Including American Express. Full, current balance and that's it. That's my cut off and always has been.

If I were you, I'd stop trying, in case you irritate them and alert them to nefariousness that you aren't actually doing but they'll think you are.

[DoppelgangerD]

I agree that I wouldn't keep overpaying, especially by so much.

I overpay all the time, but just to the amount of pending charges, or charges I know I'm going to make soon.

Unless you are literally charging $1000+ at a time, that money is better off in a HYSA collecting interest, then wait till the due date to pay your balance.  Making that the standard will save you money in the long run.

Of the cards I currently have, and as mentioned above, Cap1 will let you overpay somewhat, Amex lets me too, then my Chase Freedom Flex lets me overpay as well. I haven't experimented beyond pending charges with the CFF.

[SRT4kid93]

Strange, 

yea all my other cards usually have a restriction on how much I can prepay/over pay. when I set up the payment just now on my gold card it was going to let me overpay by 1000%. But when I tried on my BCP it would only let me pay my current balance plus any pending charges but not a penny over. I was just curious why it was going to let me on my gold but not BCP.

I didn't actually do it, I just typed in the number. And usually it says something like "you can only pay up to this amount" but it would have let me post the payment had I wanted to.  It was more just a curiosity thing, I'm not actually planning on doing it continuously.

 
the 1 time I over payed was due to a charge I knew I had coming up that would immediately eat up the $1000 prepayment.  

[JoeRockhead]

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@SRT4kid93 wrote:

When I first got my BCP I prepared/overpaid by $1000 and it was fine. Ever since it won't let me over pay. 

I just tried to over pay again just to see and it wouldn't let me, but then I tried to over pay my gold card by $1000 and it was going to let the payment go through. 

I know over paying can be a sign of money laundering, so is there a limit where you can only over pay 1 payment per cycle or something?

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The reason they'll allow almost unlimited overpayment on a charge card vs a revolver is due to how each product is structured, and regulated. 

Without going into a long, mundane explanation.   Revolvers, are structured on the premise of lending you money with a set credit limit, and are more heavily monitored for compliance in regards to consumer credit regulations and anti-money laundering laws. 

Putting POT limits/terms aside, charge cards aren't intended to have a set spending limit.  They rely more on the account holder's spending/repayment history to establish what spending limits they might, or might not approve going forward.  By over paying, or pre-paying a balance (because a higher than normal purchase is forthcoming), they would be viewed more like a debit card attached to a bank account, or dare I say even as a prepaid gift card.

Unlike charge cards where PIF is expected every month, overpayment on revolvers can often trigger red flags for fraud, so... Don't do it.  

Before someone says there should be no difference, or that it makes no sense, please go back to the first sentence,  and read it again.   

[dfwxjer]

What is the goal of overpaying on a card? As others have noted, this might trigger a red flag with your issuer with no real benefit to you. 

[SRT4kid93]

@JoeRockhead 

that makes perfect sense, thanks for the explanation. 

@dfwxjer 

Don't worry as I said this is not something I will be doing regularly. I did it once because I knew I had a large purchase that would immediately eat the over payment. And then it made me curious why they allowed me to over pay that time, but not others. 

so just to test it out, I pretended like I was going to make a payment on both accounts without actually doing it, just to see if they would let the overpayment go through. 

and it turns out the charge card would have allowed it while the revolver would not have. 

[creditrizz]

Too long of an explanation to get into detail about, but according to most risk models a dollar spent on a charge card is typically lower risk to a lender than a dollar spent on a revolving credit card.  Pre-paying increases the exposure and risk, since if the ACH is reversed at some point it could result in your defualt on more than the risk originally allocated to you by your credit limit.  Since charge cards are inheritently less risky to a lender than a revolving credit line of the same amount, their model may allow pre-payment to a certain amount on a charge card but not on a higher risk revolving credit account.

[redpat]

SMH, can someone explain to me why one would overpay?

It's counter intuitive for having credit and using a about a 45 day float.

[SRT4kid93]

@redpat 

Well in my situation my BCP limit is far too low for my needs. I can use the entire line or credit in 1 transaction. 

so for me, I knew I had a transaction that would eat my entire credit line and would need to make a payment to be able to continue using the card. So there was literally no difference. Either I prepaid before the transaction or I paid 5 minutes later after the transaction.