Anyone ever overpaid their credit card before a large purchase?
This year is the first year that you can pay your UK tax using a credit card, for a small fee.
My tax bill is literally 15 times the limit on my BMI credit card. I am planning to put my BMI credit card (issued by MBNA) into credit by making a massive payment to MBNA, and then immediately paying my tax bill. MBNA has confirmed that I can do this.
My only concern is that I may not get the miles for the tax payment (it IS treated as a purchase, not a cash advance) because I am paying it from a credit balance and not actually using MBNA's money. The terms & conditions of my card don't mention miles once, yet alone how they would treat this situation!
Does anyone have experience of successfully getting miles from using a credit card when you have put it into credit beforehand?
Amex took 2 payments by accident putting my card into credit when I spent the money over the next month the miles were credited as normal, this month I paid on the 5th and they took the same amount yesterday so I am in credit again, I expect the same thing will happen again
I've done this with my Amex cards both in France and the Netherlands without any problem. Miles posted for the purchases as it should be. The same for my German Visacard and later my German Mastercard.
But I don't know the UK-rules/laws, so it is the MBNA who could help you out.
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We have done this before with our UK MBNA Business Card that earns BMI miles & not had any problems.
It usually gets "overpaid" in circumstances where an employee has been stuck for foreign currency & either used the card @ an ATM or Travelex & by "overpaying" when the statement comes round they are not constantly adding interest.
Only thing we had to do was get them to change the D/D to be something like "dynamic" so that they calculate the D/D a few days before taking it & not by the statement date.
From reading that you are paying your Tax bill I wonder if you can also pay Corporation Tax, that would be an easy way for some "cheap" miles.
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Last year I used Amex to pay a substantial amount (well over my normal monthly "limit") of taxes in the US. Called Amex in advance and wired the funds to my account. With the credit in the account, the tax payment was promptly processed and my miles credited on the next cycle. I paid 2.49% which I considered a good deal since I use my miles mostly for premium international award travel... so $2,490 buys SFO-FRA/MUC-CDG in LH F, normally an $18,000 ticket.
Generally a pre-payment does not increase your credit limit, so as mentioned above you probably need to call your bank after you make the pre-payment and let them know what you plan to do and see if they can give you a temporary credit limit increase.
In the United States have done this with Bank of America Visa. I called BofA fraud department after I overpaid and told them where the payment money came from ( there own bank account) and where it was going and the use for three +$100,000. purchase in dollars.
There was a very common fraud commited with overpayment on a credit cards and that is why many people will have problems doing this.
If/When the bank becomes un-cooperative, one might consider "installments", rather than "lump sum" payment strategy; surely, the tax-man will gladly accept whatever you send -- and the final %-fee is unchanged.
Caveat: some banks are known to cap the number of ACH payments per month
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Some banks allow this, some do not. When allowed, it will not increase your actual limit, but it will effectively have the same impact, as you will have more "room to spend" before triggering a cut-off. Prepayment doesn't alter the awards earned - the type of purchase/charge determines this. Keep in mind that prepaid or not, very large charges often require preauthorization. I spend millions on credit cards through my business each year, but even we run into preauthorization issues at times.
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I can confirm this works for both the Chase UA Visa and multiple American Express cards. I used to do this all the time with tax payments. Sometimes I would notify them, sometimes I would not. I think when they see the charge request from a source like pay1040 or officialpayments they know what you are doing.
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