RNE

Goal:
I'm going to purchase a $92k jewelry item for my wife. I have the cash, but I want to charge it on my Freedom Unlimited card to get the 1˝x URs.

Constraints:

• My credit limit on that card is $10k.
• It seems foolhardy to ask for an 8x credit limit increase.

Background:

• My FICO is 830+
• My total credit limit across all Chase cards is $43k.
• Yes, I know a 2% cashback credit card is a consideration, but a UR is worth approximately 4˘ to me.

Question:
Can I pre-pay, say, $83k on my Freedom Unlimited card to create a credit balance, thus getting the net purchase amount to be under my credit limit and thus the $92k charge to go through?


RNE, asking for a friend.

mia

It this is a VISA Signature card it has the No Preset Limit feature which allows you to exceed the nominal limit, but probably not by a factor 10. I would call and ask them. I would not send an overpayment without an agreement.

RNE

Good advice. I talked to Chase. They claim their "system" will automatically reject any payment more than 3% over the amount owed. Not sure I believe this, but in any case, I'm abandoning the over-payment technique.

But I found a doable, albeit cumbersome, workaround. The jeweler put the purchase on an 18-month same-as-cash account. Surprisingly, they allow use of a credit card to pay down that account's balance. So, every month, I'm going to pay an amount equal to my Freedom Unlimited's credit limit, until my account with the jeweler is paid off, thus not losing out on ~138k URs.

RNE, advising that it won't take anywhere near 18 months to complete this workaround. Meanwhile, TSMRSRNE is rocking some awesome jewelry!

mia

Did you ask about exceeding the card's nominal limit by a more modest amount?

Ms mia's task for today is to secure all of the jewelry before Irma scatters it.

StartinSanDiego

A CL increase, with the "same as cash" payment plan, could make this go very smoothly in just a few months. Sounds like a good plan to me!

NYCFlyer10001

Sending a payment to them through your bank's bill pay feature is a way around their "system" not letting you overpay and has been used regularly by other folks for other reasons. I don't know that their system would have ever approved a purchase of that size even with a credit balance that large, but JSYK, you can definitely overpay any arbitrary amount you want by pushing the money in from your bank rather than letting them pull it.

RNE

I agree with you regarding the bank bill pay. I think it would have posted as a huge credit on my account, despite what the Chase rep stated.

As for approving that large of a purchase, I was going to notify Chase beforehand, but still expected to get an alert or phone call or even an outright denial that I would then have to try to get reversed. Now, we'll never know.

RNE

Nope. But the rep naively suggested I ask for a CL increase. I declined. No way would Chase jack it up to $92k, and I didn't want to take a hard pull for nothing.

Ironically, I ended up taking that pull from the jeweler. But I got a $100k* limit from them. ^

*At the risk of stating the obvious, the jeweler in question is not a mom and pop shop, but a gigantic, nationally known company owning several chains of jewelry stores. They have big bucks to offer credit to a sap like me who overindulges his wife.

Thanks. I thought so too. The jeweler didn't have to twist my arm.


RNE, warning others: My credit score is going to take a hit not just from the hard pull (no big deal) but also because the unpaid jewelry bill makes my debt to credit ratio high (60%+) until I can pay off that bill month by month by agonizingly slow month. Fortunately, I'm not applying for a mortgage or car loan or any other credit product in the foreseeable future. Once the jewelry bill is paid off (or even substantially so), the ratio problem will go away.

wyseson

Prepaying a credit card by $83k or any amount is also alarming to the credit card company. It is an indicator of potential fraud or money laundering on the account and can easily result in the account being suspended pending investigation.

skywardhunter

This seems so odd. In South Africa where I am credit and cheque accounts are basically the same with the only difference that a credit account has a negative limit (credit limit). I can transfer money in an out as I wish instantly and use my credit limit for any purpose as I would use my cheque limit. My business has a credit card with a 0 limit since we don't need credit by that way I get travel insurance and lounge access by using to to buy flight tickets, by transferring in the money (i.e. overpaying). You can also transfer in money anytime and if on your statement date your balance is 0 there's no required minimum payment

mia

In the USA credit cards are generally not linked to a specific deposit account. They are unsecured personal lines of credit, and there is no necessary connection between the issuer of the card and the bank account used to pay it.

HawkeyeFlyer

Curious, have you intentionally kept your Chase credit line low? You do not mention income but you seem to have $100k disposable pretty easy and a high credit score. Why is your credit line only 10K to begin with?

RNE

I'm retired. I have a great deal of wealth, but not a lot of income.

HawkeyeFlyer

Makes sense.

However, if you have several million in investments, even conservative investments, the income on those paired with the actual nest egg would be more than enough to secure a higher credit line

$3mm at 3% is still $90k per year

RNE

Your musings are both learned and well-reasoned, however my situation is fairly unique. Ninety-nine percent of my wealth is in a quartet of Roth IRAs. Thus I have no income from almost all of my wealth.

That said, yes I could request a higher credit limit from Chase and would probably get it, but I don't really need greater spending power because my making purchases in the high five figures is exceedingly rare.*

RNE

*The purchase in question was a lump of carbon dioxide that had been underground for a billion years at approximately 1200°C, under about 700k psi, brought to the surface via a volcano, then mined and cut and polished.