What happens when I preorder a game using my temporary Microsoft account balance and cancel...

It's actually not a glitch and the preorder will get cancelled. When you pay with anything other than your Microsoft account balance, you're not charged until about 10 days before the game is released. So once they try to charge the card with no money and
can't, the order would get cancelled.

If you preorder with anything other than your Microsoft account balance, you're charged within 10 days of the game's release. As long as the order doesn't show as cancelled at http://account.microsoft.com, then you should be fine.

apparently they took the money for a game i preordered a month ago now instead of back then. False alarm, won't let me delete the post. still didn't pop up in my orders though which is why i got flustered. This never happened before. I preordered stuff before
and it took the money right away. Does that always happen? Or is it a first time for me?

They changed the way preorders work about a year or so ago. If you preorder with your Microsoft account balance, the money is taken out immediately. If you preorder using a credit card/Paypal, you're not actually charged until about 10 days before the game
releases.

Can someone please tell me why I purchased the pre order COD3 and now it's saying I don't own the game even though at the top of my screen it says "congratulations on purchasing COD3" what the hell is going

When you pre-order a game with a debit/credit card or PayPal it doesnt attempt to charge you for said preorder until around 10 days before the games release date (you might have seen a temporary test charge for the amount of the game when you pre-ordered but that would have dropped off and gone away after a few days)

If the actual charge for the game gets declined (within the 10 days of release) then the preorder would be cancelled.

Id check the billing history on your Microsoft account to see if this is what happened and if the charge shows as "declined". If it does show this then you just have to attempt to buy the game since the first one didnt go through.

If pre ordering a console falls under the same category as pre ordering games, then you should be able to use your Microsoft account balance for preorder.