So I want to pay for my entire vacation with a CC, for points, and then pay it off online as soon as it hits. My question is, what happens if the vacation is canceled and I receive a full refund? I assume that the refund will go back on the CC I used to pay for it, but how would I go about getting that money back into my bank account?
Better yet, we are taking two individuals with us and they have said I could pay for their vacation with my CC (they are giving me the cash to pay the card off) for even more points, how would I get the money back to them in case of a cancellation?
It’s simple… when you get a credit posted to your CC it absorbs the subsequent charges you put on your card. If you get a $10,000 credit, you won’t have to pay any money into your CC account until you’ve had $10,000 worth of charges.
If you can’t write a check for your friends, maybe you could pay off some debts for them using your CC.
Chase and Citi have a thing about credit showing on a card. Any time either card closes with more than $1.00 showing as credit they either want my account number to deposit it or, if I ignore their request, they send a check. I always make them do the latter. I think they are being ridiculous - they say it’s the law.
I tend to pay as soon as I charge something. Recently the charge was still pending the day the account closed out with the credit showing. Charge hit the card the next day. The day after that they cut a check for the amount of the credit which was also the amount of the charge that was now showing on the card.
Possibly. Depends on how you look at it. It’s my version of zero based budgeting. I have no fondness for charging something one month but then paying for it with the next month’s money so to speak. When bill pay came into existence I changed the process. I use my bank bill pay and as I charge I just add the amount to the next scheduled payment. The cards gets one payment a month, I get a zero or slightly negative balance (I tend to round to the dollar) due each month. It also means I’d catch any unauthorized charges almost immediately and my income for the next month is available for any possibilities rather than being obligated to something I did the previous month. Anything left over becomes my second monthly savings deposit and my checking account starts every month the same. It works very well for me.
What’s the advantage of paying off a charge a month ahead of time?
Because you must pay interest on an unpaid balance, I’d guess they are probably required to either pay you back or pay you interest on the credit in that same account.
From a legal perspective it would be called a “bilateral contract.”
We’ve certainly wandered down a winding path. My initial point was intended to be that not all issuers handle a credit balance the same way. I have cards from five other issuers who have never had a problem if there is a credit balance on the statement.
As for the other comments, my system works for me. I know that the money left at the end of the month is not obligated for a bill to be paid the next month so it goes into savings. This has significantly increased the percentage of my pay that gets saved every month.
I appreciate everyone’s input. For really expensive purchases, I save the money, put it on a rewards card and 3 or 4 days later I pay it off.
My quandary is, if I pay it now and something comes up and have to back out for a full refund, that refund goes back on my card leaving it with a large credit balance. I saw where someone mentioned that some CC companies send a check for that balance.
I think I will just call the CC company. Maybe should have done that to begin with just wanted to see the input. Thank you everyone.
It sounds like you have found a system that works for you. Everybody’s a little different in their approach to how they handle their finances.
But your experience of having Chase and Citi insist on cutting a check to you appears to be an anomaly. I’ve used credit cards since the 1970’s, including Citi and Chase, and have never carried a balance on any of them. I pay them off in full each month well before the due date. I’ve often noticed a credit coming in after I make the payment and I’ve never had them insist on sending me a check for the credit balances in any of my card accounts.
Like I mentioned in an earlier post, the reason for your experiencing the actions you have from your CC providers probably lies in the fine print of a contract you and they have agreed upon. I doubt that they are lying to you about that.
In 2011 I was able to buy a new Sonata with my Alaska Airlines Visa card. I had previously reserved the car with a $500 Visa CC deposit after setting up the sale through the Costco car buying program. Before traveling to pick up the car I checked with Visa and asked them if it would work, ($23,500 car price & $25k card limit,) and they said fine.
When I got to the dealership and was signing closing docs I ask the guy if I could just put the balance on my card, and he said yes! I used the miles a few years later to buy two first-class round-trip tickets to Central America.
I tried that once at a Honda Dealership. First I tried a CC and they said they could not do over $5000 in a single transaction. I was OK with multiple transactions but they said it would decline after the 3rd time. I then pulled out my checkbook to write a personal check and they claimed they could not accept personal checks over $1000. It was about 7:30PM at that point. I pointed out I had provided 2 perfectly acceptable forms of payment and the only other one I was willing to provide was cash, which is sorta hard to get at that time of night. Ended up taking possetion of the car that night, UNPAID and returned the next day with cash to pay it off. The cashier was very amused when I came in with $15000, $6000 in $20s because that is all the bank would give me. And yes, I broke each strap so the dealership would have to COUNT the money.
I ran into a similar situation when we bought a car this year. They wouldn’t take over five thousand on a CC but had no problem with me writing a personal check for the $55K+ for the balance. But that was in the morning and on a weekday. I’m pretty sure the financing desk was confirming funds while the sales people were familiarizing us with the car. And… trying sell us about $5K in add-ons and all kinds of undercoatings, overcoating and sundry “protectorants.”
