Question about credit card companies

[joecon916]

Hi All,

I have 4 credit cards (2 with Citibank, 1 with Chase and 1 with Toyota Financial). I have a few questions and I hope you can answer them:
1) I have been paying all my bills on-time over the last several years online and will default for the 1st time this month. I use each CC companies own websites to pay each card, I don't use my Credit Union's web bill pay option (if that makes any difference). Can the CC companies automatically pull money out of my checking account on their own without my approval? They all know my checking account number because of the online payments.
2) Can I just pay 1 credit card and not pay the others? The balance is low and the monthly payments are low as well. The reason for me wanting to keep 1 card is in case of emergencies.
3) As I mentioned, I bank with a credit union and thankfully, do not have any loans with this credit union. Am I safe to just keep my account there or should I open another account elsewhere, since the credit card companies already know where I bank?

I am recently unemployed (my severance package ends in July) and the salon we bought a couple of months ago is losing money. I want to stall on filing for BK for as long as possible, just in case things turn around. I am just concerned of getting what little money I have in checking being taken away from me.

Thanks!

[DebtHater]

Hi All,

Can the CC companies automatically pull money out of my checking account on their own without my approval?

Can they legally? No. Has it been done before? Yes.

2) Can I just pay 1 credit card and not pay the others? The balance is low and the monthly payments are low as well. The reason for me wanting to keep 1 card is in case of emergencies.

Yes you can. The catch is if you do end up filing BK this could be considered a preferential payment. If you do end up filing, you will have to list all of your debts. This one "emergency" credit card would not survive the BK. The best solution for emergencies is an emergency fund, not a CC card.

Am I safe to just keep my account there or should I open another account elsewhere, since the credit card companies already know where I bank?

Not necessarily change banks, but at least open a new account. This way if the cc companies get greedy, there is nothing there for them.

Not knowing your entire financial situation it's hard to say if BK is you best option. Just be careful you are not prolonging the inevitable. Between multiple credit cards and a failing business, it sounds like you very well could be.

[kartoons19]

Joecon916,

I would make sure to call the CC to tell them you are stopping your autopay. Don't trust that you can cancel it online even though it may give you that option. I ran into a problem with Citibank and Cap. 1. I cancelled my autopay online for both cards, but both still deducted the payment from my account after I cancelled it. With Citibank, I cancelled autopay only 3 days before the payment was due, which was not enough time for them to process the change. They would not reverse the payment. With Cap 1, I cancelled my autopay 30 days prior to the payment due date and when they deducted the payment; they said I was supposed to call them to cancel autopay, even though it gives that option online. I did get my payment back from Cap 1, but it could have been a mess. Fortunately I had enough $$ in my checking account to cover these payments.

If you pay one credit card and not the others it may be considered a preferential payment. You may want to do a search on this forum for preferential payments as there is a lot of information about it. If your goal is to try and keep one credit card after bk, keep in mind that most creditors will close the account even if you have a $0 balance.

You should be fine keeping your account at your credit union since you don't owe them any money. The only bank/credit union I have heard that freezes your account even if you don't own them money is Wells Fargo.

Hope this helps.

[catleg]

Do you make a one time payment each month thru the website, or are you enrolled in autopay? Obviously autopays are a problem to stop.

Why bank with a CU anyway? I've never seen any advantage to it.

Don't plan on any credit card surviving BK. Cash is what you need for emergencies. As long as your credit card use is "tasteful" before filing you won't get any objections.

Similarly once you start defaulting they will all eventually figure it out and cut your limits and close the accounts. Be prepared for this.

[joecon916]

Thank you for your replies. I don't have auto-pay set up, I just log on to each CC companies website, enter the amount I want to pay (usually the minimum due) and click the "make payment" button manually each month. I'm just concerned the CC companies will take the liberty to take money out of my checking account without my approval since my checking account info is basically in their systems.

If they can't do this, then I won't worry about it. But if it has been illegally done in the past, then perhaps I should just transfer all my available funds to the savings account at the same credit union and just leave enough money in my checking to cover expenses for the week.

What do you think?

Thanks again!

[kartoons19]

Okay, I misunderstood your post, I thought you had autopay set up. Since my autopay issues with Cap 1 and Citibank, I have not had any problems with creditors taking money out of my account even though they have the acct number. If you are concerned about it, then just open up an account at another bank or credit union.