Understanding The Credit Card Limit

Lcheapestisthebest on 26/11/2022 - 08:53

I have some personal expenses coming soon and I have enough saving on my bank to pay it in cash . Since I am going to spend the money I am thinking I might as well spend it via credit card to get the points and bonus offer.
My question is if the credit card limit is $10000.

  • Can I use $9000 in 1 day and pay the credit card full amount on the same day and again use $9000 next day?

  • Is this allowed? and will it have any consequence/impact on credit score?

I tried reading different guides and videos but was not able to get answer for this. Also I plan to pay all the expenses and don't plan to carry forward any credit.
Currently I am looking at getting ANZ Rewards Black

Financial Credit Card

Comments

  • ifyareckon on 26/11/2022 - 09:04
    +9

    More than ok. We normally pay our card off multiple times a month and put all of our expenses though the card. It has been a long time since we have paid any interest on the card. No effect on credit score.

    • cheapestisthebest on 26/11/2022 - 09:08
      +2

      Thank you for confirming

    • drewbytes on 27/11/2022 - 08:10
      +1

      Why pay it off multiple times a month? You potentially lose out doing that. All our cash sits in an offset account against the mortgage (as many people do). We pay the c/c on the 1st of each month in full and never pay any interest. But the cash sits in the offset all month, lowering the interest on the home loan. If you pay multiple times a month then you're losing out on that offset arrangement.

      • pangwen on 27/11/2022 - 08:14

        @drewbytes because in the context of this post (where the OP wants to spend more than the credit limit each month, and it seems ifyareckon is doing the same), then you need to pay it down once you reach the limit?

        It sounds like ifyareckon is spending multiple times their credit limit each month - they’ll need to pay it off multiple times during the month to achieve that.

      • Inertia-g on 27/11/2022 - 09:55
        +3

        For me it may be I have higher expenses that month, but I don’t really want to up my credit limit permanently

      • ifyareckon on 28/11/2022 - 09:07
        +1

        @ drewbytes We currently spend 2-3x our cards credit limit on living expenses. Not wanting to get a card with a higher limit so pay it off as needed as the limit is reached.

  • Ocker on 26/11/2022 - 09:09
    +8

    Technically you can, but the card issuer may wait until the repayment is cleared before re-instating your limit

    • Neoika on 26/11/2022 - 09:15
      +1

      Yes, some are quicker (if not instant) to restore available balance.

      • cheapestisthebest on 26/11/2022 - 09:25

        Nice. I never had a credit card. I assume there will be a way to check the limit available in the card?

        • RMBC on 27/11/2022 - 11:15

          Yes, usually online banking/login will tell you the balance available at any point in time

    • Lastchancetosee on 27/11/2022 - 12:13

      Amex is notoriously slow to register payments by bank transfer, but purchases go through immediately.

      • lgacb08 on 29/11/2022 - 11:32

        Coles Mastercard is even slower. I paid amex via bpay before 9am and the balance always get updated by 9pm that date (not weekend of course). Same thing with Coles balance won't be updated well until next day.

  • andrek on 26/11/2022 - 09:12
    +2

    That's what I do with some large payments that vendor allows to split and pay over a few days. Great for points.

  • jace88 on 26/11/2022 - 09:34
    +1

    I toss up between increasing credit limit vs just making early payments to bring back the available balance (but some cards are faster at restoring the available balance than others, and some may have restrictions in terms of how many prepayments you can do via one channel at a time). The issue with latter is you're missing out on the interest free period (which is nice to have when your cash is otherwise sitting in mortgage offset account).

    • cheapestisthebest on 26/11/2022 - 09:54

      thanks for sharing.
      I was unsure about having higher credit card limit and read that frequently changing credit limit can have impact on credit score.

      • jace88 on 26/11/2022 - 21:35
        +1

        It will, and you can always ask for it to be reduced later on. But this assumes you just need a bit more limit just for this month. If you are regularly going to be spending that much, then I'd probably just go for a higher limit. The impact on credit score is more if you have lots of credit cards, and you don't pay them all off.

  • mantra on 26/11/2022 - 10:58
    +1

    might be possible to have $500 credit limit and apply a positive balance of $18000 for the purchases?

    • cheapestisthebest on 26/11/2022 - 11:11
      +1

      how can we do that?
      Is that done by first depositing the amount on card and then making the purchase. I will also check with card provider for this option. Thank you.

      • mantra on 26/11/2022 - 11:13

        yes best to check with them, my CBA card goes into positive paying (depositing) more than i owe, never tried an amount higher than my credit limit though

    • TheMindsetTraveller on 26/11/2022 - 12:18
      +1

      Possibly, but premium-type rewards cards usually have much higher minimum credit limits though. Doubt a black, platinum, titanium or whatever they call it card will offer $500 credit limits.

  • CodeXD on 26/11/2022 - 11:17

    Might be worth getting a second credit card to take advantage of the introductory offers.

    https://www.ozbargain.com.au/tag/credit-card

  • sim0an on 26/11/2022 - 11:20
    +1

    Yes

  • bobbieb on 26/11/2022 - 12:55
    +6

    Just adding to the previous answers that concur that this should be ok.

    My personal pro-tip… get your credit card from a bank that also has a good Osko payments setup. That saves me having to deal with the delay of making card repayments over BPAY. When you wanna make a payment, use Osko to move the cash into a transaction account at the same bank as the credit card, then pay the card from the transaction account. Paying this way means the cash hits the credit card balance almost instantly (at most banks.)

    • cheapestisthebest on 26/11/2022 - 13:57

      Thank you for the tip. I will try this while making the payment.

      • dcep on 26/11/2022 - 15:39

        Check the daily limit of OSKO payment, they varies between different banks.

    • ol mate on 26/11/2022 - 15:42

      Can confirm ANZ (the bank OP is looking at) will increase the available funds immediately.

  • AndyC1 on 26/11/2022 - 15:42
    +1

    You are better to transfer the $18K to the CC a few days before you spend the 2 x $9K as it will take a few days to transfer in most cases and then there will be no issues with paying via the CC.

    If your account and the CC both have osko then you can transfer the morning you want to put the $9K on the CC, but I would transfer say $100 this weekend and check the CC balance about 10 minutes after you transfer the money to see if it goes through "instantly". Instantly in bank terms could be a few seconds up to a few minutes.

  • Waltervp on 02/12/2022 - 12:00
    -1

    I could be wrong but i believe the credit limit is not actually a credit limit but a 30day monthly spend. I've been caught out by it 10+yrs ago when the card stopped working even though i was in credit. Turned out it was a spending limit for the last 30days, not even monthly! Now i just have a huge limit and don't get caught out.

    Another thing that got me worth automatic payments was that even though i had made some manual payments from another account the full monthly spend was transferred at end of month, (putting card in credit), but leave my bank account overdrawn or it was declined - causing charges.

    Bottom line, these financial institutions have small print to ensure they can charge like a wounded bull.

    They are flexible in crediting fees back if you ask/explain.

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