Do most credit cards allow a positive balance?
I have a Visa credit card, issued by a German bank. The card allows me to carry a positive balance and even pays a small interest on it (called Visa Sparen -- Visa Saving). I find this convenient, because with a standing order it means that most likely I will never accidentally run into credit card debt. But it also sounds counter-intuitive that a credit card allows positive balance and pays interest. It's the first time I have encountered this. What I usually hear is that credit card users accrue some negative balance over the course of a month or so and (usually) pay it off at regular intervals.
Thus I wonder: Is this a special thing with either my German bank or Visa; or do many credit card companies allow a positive balance that pays interest?
To specify in response to an answer: By positive balance I mean that I have credit (the bank/card issuer owes me money); by negative balance I mean that I owe the bank or card issuer money.
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We have several questions on this site about people wanting to know about paying money to their credit card to artificially give them a higher credit limit. Based on the questions and answers the ability to do so is widespread. Sometimes this also happens when a person returns an item to the store after sending money to pay the credit card bill.
Thus I wonder: Is this a special thing with either my German bank or
Visa; or do many credit card companies allow a positive balance that
pays interest?
I have not heard of a bank or card paying interest on that positive balance, so I don't know how widespread it is. My credit card will send a check if I leave a positive balance on my card for too long.
I am not sure what benefit you would get, unless the interest rate was highly competitive compared to a savings account. I understand when people who have credit cards with a low credit limit need to use the credit card to pay for an item over their limit, so they pre-pay the card before they buy the item.
I have to wonder which is more risky: keeping an extra 0 on my credit card, or an extra 0 in my savings account?
I find this convenient, because it means that most likely I will never
accidentally run into credit card debt.
It is normal to have a negative balance on the card during the month. If you always pay the bill by the due date, and you use the card frequently you will always have a negative value. The key is paying the bill by the due date, it avoids interest.
What I usually hear is that credit card users accrue some negative
balance over the course of a month or so and (usually) pay it off at
regular intervals.
People who pay multiple payments a month, are trying to keep their balance below 30% or even 10% of their limit. This can help their credit score.
do many credit card companies allow a positive balance
Chase, at least in my personal experience, in the US, allows your card to have a "positive" [really it's a negative] balance.
that pays interest?
No, it's doesn't pay interest.
What I usually hear is that credit card users accrue some negative [positive] balance over the course of a month or so
That's how credit cards works, their purpose.
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