BootsnAll Travel Community

I remember reading - somewhere - that you can pay money into your credit card account before you go travelling (and whilst away) - like a debit card with protection ,so you can use it (for the security aspect) without incurring interest charges. Has anyone done that? It sounds a good idea (if I can get a card before I leave in December!)

Is there a reason you wouldn't be able to just pay off your balance every month via internet?

I'd recommend calling the card company and asking them. Also, I like genaro's idea of paying online. I like to know what I'm paying before I pay it... you never know when somebody gets their grubby little hands on your info... too bad we have no "grubby little hands" face...

This is what I do (i live in indonesia and was having a bit of stress sorting out how to organise my banking) - i transfer my salary online) ontomy credit card every monmth, and then use it as a debit card.

I could technically use it as a credit card too, but I like knowing that I am staying within my monthly pay....just a way of feeling on the safe side I guess.

There are other options. I have a linked savings account that acts as collateral against my credit card. Unlike upping your credit card, the cash in my account earns interest. I also have the option of paying off my cc bills from a checking account at another bank or drawing down the money in the linked account.

I would ask your credit card company or review their terms. Some of them have policies about credit balances. They might just send you a paper check for the negative balance amount after a few months of always having it.

But why do that at all when you could be earning interest on your money.

Get a free hsbc online savings account (no min.) with an atm card.

Depending on the length of my trip, and whether I'll be near any computers for online banking or transfers during the trip I've paid ahead on my credit card.
Done it a couple of times and never had my CC company try to refund the $$.

My credit card won't let me pay more than 110% of what I owe, so I can't exactly stash money there.

I suppose you could buy something expensive, pay it off, and then return the item and let them credit the money to your account.

Seems easier to just pay it online every month though. Besides, you can be sure that Visa or Mastercard is NOT going to pay you interest on your moeny.

I think there is only the Egg card that lets you do what you're talking about www.egg.co.uk - I'm sure that's the only credit card that lets you load it up.

However, like most credit cards you are charged a fair amount to take money out while you're away.

You would be much better trying to get a nationwide account, that is the best one in the UK for travellers - no charge to take money out abroad.

As for credit card the best one to get is meant to be from the postoffice, oddly enough, again low charges for taking money out while away.

If you check out moneysavingexpert.com there is some excellent stuff there about all kinds of money issues.

quote:

Originally posted by procrastinator:
I remember reading - somewhere - that you can pay money into your credit card account before you go travelling (and whilst away) - like a debit card with protection ,so you can use it (for the security aspect) without incurring interest charges. Has anyone done that? It sounds a good idea (if I can get a card before I leave in December!)

This doesn't seem like an effective way to manage your money. Better to keep it in a savings account earning interest and just set up auto payments each month to the credit card.

Many credit cards will send you a check if you have a negative balance so I wouldn't rely on this method.

Its very efficient Vagabondette - if you want to withdrawal cash and not pay cash advance fees. I sometimes have to credit cards - one for purchases which is automatically paid off when due and one for cash advances which I put into credit to use my money - I dont pay the debit card/eftpos overseas tranascation fee and I do get a (low) rate of interest paid. The downside is that you pay a % in foreign exchange charges - but its still the cheapest way I know of accessing cash overseas . I use the bankdirect card for NZers

quote:

Originally posted by midlifetravel:
Its very efficient Vagabondette - if you want to withdrawal cash and not pay cash advance fees. I sometimes have to credit cards - one for purchases which is automatically paid off when due and one for cash advances which I put into credit to use my money - I dont pay the debit card/eftpos overseas tranascation fee and I do get a (low) rate of interest paid. The downside is that you pay a % in foreign exchange charges - but its still the cheapest way I know of accessing cash overseas . I use the bankdirect card for NZers

This could be, but I think that if you plan appropriately you'll make more in interest on the money in the bank than you'd spend on transaction fees. I guess it also depends on who you bank with. My CU doesn't charge me for overseas transactions. But, like a mentioned, I don't know many (if any) credit card companies who will let you have a balance like that for more than 30 days. After that they send you a check. And if you did use the money on the credit card via a cash advance the interest rate (even though you had a positive balance) would be about 20+% and it would start accruing immediately.

Perhaps it's different with NZ credit card companies.

Yup definitly in different in NZ - never heard of any credit card company sending you a check! Very few pay interest though - the one I use pays the same rate as my transaction a/c so given the annual fee of $7.50 compared to fees on every transaction its actually a potential replacement a/c - not that they advertise it like that!

And yes the last thing you want to do is have a cash advance of their money - bad bad interest rate and payable immediately

My father did this for me in 04 when I was studying and living in OZ for 7 months. Basically when you "overpay" your credit card bill you produce a credit, and then when your bill comes up it just deducts it from the credit until it becomes negative and then you run a regular bill. I would just double check that you can: A. pay ahead like this and B. you wont have to worry about paying your bill that it will just reduce the credited amount when your bill rolls around...

I used to work for Capital One US for three years. I strongly recommend NOT paying huge sums of money to create a large credit balance on your credit card. This is a very popular tactic that fraudsters use, so credit card companies are very wary of customers who do this. Here's why:

Let's say someone has a credit limit of $1000 with a zero balance, and this person is a fraudster. They send in a check for $3500, giving them a temporary credit limit of $4500. As soon as the payment posts, the person then goes on a massive spending spree that lasts 2-3 days. The more savvy fraudsters will use the funds to buy Visa Buxx, store gift cards and the like (as opposed to returnable items like furniture, electronics, etc.). They max out their card -- not just the $1000 credit limit but also the additional $3500 credit balance. And then lo and behold -- the check bounces. The fraudster dumps the card, never pays their bill, and instead goes on and enjoys the rewards of their thievery. This happens more often than you probably think it does.

To combat this, credit card companies like Capital One try to limit the potential fraud by putting a hold on the payment for a few days, even 10-14 business days. This means the account is still active but the funds from the overpayment are not accessible. Putting a hold on the payment helps to ensure that those funds are not spent before the check actually clears the customer's bank. (They will also do this on accounts with a history of bounced checks, even if it's not an overpayment.) This is also why a lot of online payments are limited to 100% or 110% of your balance due.

If a Capital One credit card has a credit balance, a refund check is automatically mailed to the customer after four months for whatever credit balance remains.

All of this said, please note that my comments are based on my experiences with Capital One US credit cards. It may be different for other credit card companies, in the US as well as outside the US. And Capital One UK may have different policies from Capital One US.

~ Jenney

You'd never get access to funds from check in Australia/NZ until it cleared - takes about 7 working days - most people would use internet banking to deposit the money securly and immediately