Originally Posted by
dave_261
Question and comment:
Question on putting big spend on a CC... can someone explain the concerns with this? If you have a $25k (or whatever) credit limit on a card, and you put a $24k charge... and then pay it off quickly... what is the risk here?
Comment about using a CC for taxes... I do think under the right circumstances, this can be a breakeven prospect. Let's say you have a $60k tax bill. If you have a Hyatt business card, and need (for example) 30 tier qual nights to hit Globalist, or for a Tier status, I believe the math works out. You're basically buying Hyatt points at 1.87/cents, which feels like a good sweet spot for redemption. PLUS, you're getting the bonus of additional milestone rewards (hitting Globalist, extra points, extra upgrades, etc.). So if you can pay off the card quickly, it feels like this is a reasonable scenario.
Answer to your question: charging $24k to a card with $25k limit coincides with what people maxing out their credit once and for all would do, so banks are very sensitive to it. A friend of mine got shutdown by Chase exactly for this reason, and even though it was an honest transaction and he explained everything to the bank, they still wouldn't do any more business with him. Sometimes, when people have lots of debts elsewhere or are simply leaving the country, they just max out all their cards and never pay back. To the banks, because of how big the loss it would be, it's the opposite of "guilty until proven". I'm not saying what OP suggested would definitely lead to shutdowns, but it's always a possibility, especially when your usual spending is nowhere near that amount.