Help with credit cards

[drowning123]

That's a lie, Anna. The banks usually return the money to the creditors if funds are insufficient. I know Citibank returns the money. It happens to me all the time.

[ccsjoe]

Anna, those are regarded as returned payments, and eventually reported to chexsystems as such. They're in the same neighborhood as a bounced check and if you have enough of them, it's the banks that will report you on chexsystems. The cc's will just report you as late.

[wnguyen]

Correct me if I'm wrong. So from what I understand, chexsystems works like credit report, is that right?

[ccsjoe]

Similar. Google them for website, they are pretty informative. You can even get a sample report or order your free annual report. They have to follow fair credit reporting act rules, etc.

[wnguyen]

THanks ccsjoe. I got quite a few returned payments before filing and the credit card companies charged me NSF fees. Wonder if they reported those to chexsystems?

[ccsjoe]

The cc companies would not, the banks would to my understanding. Still, you can pull your free chexsystems report and find out for sure.

[annalynn]

even if my account has been closed my old bank could report it?

[sidhesadie]

If you close the account, be very careful.

I closed an account that had cc auto payments coming out of it, and wasn't able to stop the autopays via the CC website.
Because I didn't know what could happen, I didn't say anything about identity theft or the account being compromised, I assumed that simply closing the account would suffice and that the attempted autopay would bounce back as NSF or similar to the cc company.

WRONG.

If an ach/autopay transaction comes through within the 30 days following closing an account some banks (apparently, including mine) will FORCE OPEN the account, run the transaction thus overdrawing your account, then start charging you the overdraft fees.

This happened to me. It was a business account for a business I no longer had, at an address I could no longer recieve mail. I closed the account and went on my merry way. I had NO IDEA the account had been 'forced open' to run an autopay, and therefore didn't know that there were over $600 in continuous overdraft charges on the account. Not until I went to open a new account at a different bank several months later and was told 'no' because I was in chexsystems.

NIGHTMARE.

If you close an account that has autopays set up, WATCH IT CAREFULLY.

[tobee43]

I closed an account that had cc auto payments coming out of it, and wasn't able to stop the autopays via the CC website.

i agree...i went to the CC website and removed or replaced all my info...put their email on block and went into my local bank to STOP the payments from coming out.

[ccsjoe]

If an ach/autopay transaction comes through within the 30 days following closing an account some banks (apparently, including mine) will FORCE OPEN the account, run the transaction thus overdrawing your account, then start charging you the overdraft fees.

If you close an account that has autopays set up, WATCH IT CAREFULLY.

This is absolutely correct. In addition to tobee's post about modifying or canceling the autopay info with the cc's.

[tobee43]

yes, i have heard all sorts of terrible stories....

there is a moral to this story...bank with the "smallest" bank in town...get to KNOW the manager...because if it's a BIG bank they usually are so unpersonal they could care less...while the smaller bank still cares about your business...somewhat.

[sidhesadie]

I think people who have never experienced chexsystems don't realize the nightmare they are about to encounter if they end up in it.
I was luckily able to get the bank to remove me from Chex, due to the personal relationship I had with the banking staff having banked there 15 years.

Otherwise I'd have been on what amounts to a bank no-fly list for FIVE YEARS. no checking account at 95% of banks for the next five years. NIGHTMARE.

[wnguyen]

thanks guys for this info. I never realized that chexsystems even existed until today.

[annalynn]

OK--maybe I should just tell the banks that I have spoken to a lawyer and that I will be filing?

That should stop the collections--even though I haven't actually filed yet. I know that once I DO file, if they try to continue taking money they are in violation. I probably won't actually file for a few weeks--does it hurt anything to tell them a bit ahead of time?

[ccsjoe]

OK--maybe I should just tell the banks that I have spoken to a lawyer and that I will be filing?

That should stop the collections--even though I haven't actually filed yet. I know that once I DO file, if they try to continue taking money they are in violation. I probably won't actually file for a few weeks--does it hurt anything to tell them a bit ahead of time?

They will ask you for your lawyer's name and number, some will call to verify that there's a retainer relationship and you're not just bluffing.

As far as telling them early, it depends. If you have active relationships (direct deposits haven't shifted over yet, etc), then it can hurt you. You really need to look into specifics and decide whether it will be a positive.