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Old 22.10.2021, 08:41
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Daft question alert: keeping all your money on your credit card balance?

Hi guys. This may be a very silly question, but I couldn't find an answer when I Googled so I am going to ask it nonetheless (and yes I know I can also call my bank and I admittedly have not yet trawled through my credit card terms and conditions). This is really just a question of curiousity that popped into my head and now I can't stop wondering about it.

While my credit card obviously has a withdrawal limit (max amount I can get into debt), I have used the "load credit card" function many times to transfer in excess of 14k for significant payments and never had an issue (it just lets you load it in multiple amounts of max 5k) with hitting any limits of money that I can put onto the card to create an excess positive balance.

So, following this line of thinking, what would likely happen if you were to permanently keep all of your 'excess' money, (lets just give completely theoretical numbers of an amount of of 50-110k that for whatever reasons know only to yourself that you do not want to invest elsewhere) on your credit card balance and transferring it back to your bank account as needed?

It would seem, at least on the surface with what little practical knowledge I have gleaned on this topic, that this would mean that your money is all well protected from any fraud as well as potentially not being subject to negative interest.

Any insights on the practical reality of this seemingly daft question?

Cheers.
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Old 22.10.2021, 09:34
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Re: Daft question alert: keeping all your money on your credit card balance?

I don't think it will work, unless you spend huge amounts of money with your card. The problem is IMO the negative interest, which makes it a cost for the credit card company.
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Old 22.10.2021, 10:02
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Re: Daft question alert: keeping all your money on your credit card balance?

For UBS etc negative interest kicks in around 100k (depending on your relationship). It could work depending on the credit cardís t&cs
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Old 22.10.2021, 10:11
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Re: Daft question alert: keeping all your money on your credit card balance?

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I don't think it will work, unless you spend huge amounts of money with your card. The problem is IMO the negative interest, which makes it a cost for the credit card company.
Ahh, so negative interest would also apply to a credit card balance? I only saw blurb saying it applied to a "private or savings bank account". https://www.postfinance.ch/en/privat...est-rates.html
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Old 22.10.2021, 10:39
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Re: Daft question alert: keeping all your money on your credit card balance?

what's the purpose of doing this? to avoid negative interest on bank balances?
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Old 22.10.2021, 10:46
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Re: Daft question alert: keeping all your money on your credit card balance?

I would imagine that this could be quite costly unless you use the money loaded to purchase goods and services.

If you then transfer money back to your bank account, this could be considered a "cash advance" even if your account is in credit with the card issuer, and you would then pay the fee as determined by the issuer.
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Old 22.10.2021, 10:51
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Re: Daft question alert: keeping all your money on your credit card balance?

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I would imagine that this could be quite costly unless you use the money loaded to purchase goods and services.

If you then transfer money back to your bank account, this could be considered a "cash advance" even if your account is in credit with the card issuer, and you would then pay the fee as determined by the issuer.
I can only tell you that in my experience ,simply transferring excess balance to a bank account is not considered as a "cash advance", I have done it many times! I simply ask PF to transfer an excess amount back to my account, and they do so.

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what's the purpose of doing this? to avoid negative interest on bank balances?
To avoid negative interest would be an example, but it's really just a question of curiousity as to what the practical impact would be.
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Old 22.10.2021, 11:52
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Re: Daft question alert: keeping all your money on your credit card balance?

One thing I'd double check is if it'd still be eligible for any government scheme covering you if the bank went bust.
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