topic Re: NFCU handling of past due CC accounts in Credit Cards

NFCU handling of past due CC accounts

8bitmachinegun — Sat, 29 May 2021 12:49:35 GMT

I recently had a rather unpleasant experience with NFCU of all places. It was switfly rectified once a transferred a fairly trivial amount to my NFCU CC, but it makes me wonder about how they (and other CC companies) handle past due accounts.

Recently I purchased a new car. I paid part of the downpayment out of my NFCU checking account, but forgot about a scheduled payment to my NFCU Platinum MC and drew out about $40 too much. So when the automatic transfer bombed, NFCU instantly deactivated the card, reduced my CL to $0, and demanded double the normal minimum payment.

To their credit, once I moved the $40 from another account to my NFCU checking account and reinitiated the payment, the problem was corrected in 24 hours, and everything was restored. But this doesn't square with the experience I've had with other creditors. Usually if you miss a payment, you get a grace period before they cut you off at the knees. Now my experience with being past due is several years old. Is this typical treatment of past due accounts these days?

Re: NFCU handling of past due CC accounts

Remedios — Sat, 29 May 2021 13:46:46 GMT

@8bitmachinegun wrote:
I recently had a rather unpleasant experience with NFCU of all places. It was switfly rectified once a transferred a fairly trivial amount to my NFCU CC, but it makes me wonder about how they (and other CC companies) handle past due accounts.

Recently I purchased a new car. I paid part of the downpayment out of my NFCU checking account, but forgot about a scheduled payment to my NFCU Platinum MC and drew out about $40 too much. So when the automatic transfer bombed, NFCU instantly deactivated the card, reduced my CL to $0, and demanded double the normal minimum payment.

To their credit, once I moved the $40 from another account to my NFCU checking account and reinitiated the payment, the problem was corrected in 24 hours, and everything was restored. But this doesn't square with the experience I've had with other creditors. Usually if you miss a payment, you get a grace period before they cut you off at the knees. Now my experience with being past due is several years old. Is this typical treatment of past due accounts these days?

If I understood you correctly, you had returned payment.

The whole "if you miss a payment you get a grace period before they cut you off at the knees" isn't applicable here.

That's when the payment is late, grace period is temporarily lost, there is usually a fee plus (and interst).

Your issue is returned payment which is worse than making a payment a few days late.

A lot of other lenders would simply close the card, so I'd say you had extremely pleasant experience.

Re: NFCU handling of past due CC accounts

8bitmachinegun — Sat, 29 May 2021 13:50:05 GMT

@Remedios If true, that's a fair point. But since its a 'scheduled payment' that's pushed from the checking account, wouldn't the transaction simply not happen if an NSF condition exists? (I need to double check that; maybe the auto payment is set up on the CC side and tries to 'pull' the necessary cash regardless of checking account balance.)

That is an important distinction I need to figure out. If NFCU was reacting to non-payment exactly on time, it still seems an excessive reaction to me. But if it's essentially a bounced check, I see where you're coming from.

Re: NFCU handling of past due CC accounts

Remedios — Sat, 29 May 2021 13:59:51 GMT

@8bitmachinegun wrote:
@Remedios If true, that's a fair point. But since its a 'scheduled payment' that's pushed from the checking account, wouldn't the transaction simply not happen if an NSF condition exists? (I need to double check that; maybe the auto payment is set up on the CC side and tries to 'pull' the necessary cash regardless of checking account balance.)

That is an important distinction I need to figure out. If NFCU was reacting to non-payment exactly on time, it still seems an excessive reaction to me. But if it's essentially a bounced check, I see where you're coming from.

Not "essentially a bounced check", it's bounced payment. Method by which you chose to pay isn't relevant.

When you schedule a payment, there is no "is there enough money in the account" verification, you are basically attesting there is by scheduling it.

If you're late, a case can be made that customer forgot.

When payment bounces, the only case to be made is *there is no money*, and that's why card was temporarily restricted.

You can view it as excessive, I view it as a gift. A lot of cards issued by major banks wouldn't survive this experience, but up to you how you want to view it.

I'd write them nice review and dropped off *Thank you* note.

Re: NFCU handling of past due CC accounts

firefox100 — Sat, 29 May 2021 14:18:20 GMT

In this day of ACH debits it can turn into nightmear, last week I had ACh that was to be dollar 500 taken out of my checking account, which turned out be 7K which made couple of thousand of dollars of transactions to bounce, bank who had done the debit said it was computer error and my bank did not charge me any fees for any of the return transactions. The company who set off this chan reaction is sending out letters and my bank is also going to contact people and credit card companies that this was not my fault. I got on top of this right away. I hope this d does not cause me any problems in the long run, every one got paid.

Re: NFCU handling of past due CC accounts

Brian_Earl_Spilner — Sat, 29 May 2021 14:27:11 GMT

You didn't miss a payment, you bounced a payment. Huge difference, especially during these times. I'm sure they offered you OOPS or a CLOC so it doesn't happen again. If not, you should look into it.

https://www.navyfederal.org/checking-savings/checking/resources/checking-protection.html

Re: NFCU handling of past due CC accounts

Anonymous — Sat, 29 May 2021 15:05:49 GMT

Through whatever chain of events, with whatever excuses and justifications, you missed a payment and yet when they stopped letting you continue to use their money still that becomes an "unpleasant" experience? Then, when you finally paid they restored your charging privileges with full CL?

Sounds like a rather pleasant experience to me. I'd be thanking them for their understanding and willingness to work with me, if I was you.

Re: NFCU handling of past due CC accounts

8bitmachinegun — Sat, 29 May 2021 15:06:29 GMT

I've messaged NFCU for clarification on whether this was a missed or bounced payment, and also inquiring about ways to prevent it. So hopefully I can use one of @Brian_Earl_Spilner 's suggestions to prevent future problems. I also have a Roth IRA with NFCU that is more than sufficient to cover any missed payments, so *maybe* that's why they weren't ready to drop the hammer and cancel the CC even if it was a bounced payment.

One complication is that NFCU is not my primary financial institution, so I don't normally keep large amounts of money in my NFCU checking account. The closest branch is 100 miles away, which makes cash deposits ridiculously difficult. Other than this experience, I've usually enjoyed working with them. If I did keep my primary checking account with them, this probably never would have happened.

Re: NFCU handling of past due CC accounts

Brian_Earl_Spilner — Sat, 29 May 2021 15:13:50 GMT

@8bitmachinegun wrote:
I've messaged NFCU for clarification on whether this was a missed or bounced payment, and also inquiring about ways to prevent it. So hopefully I can use one of @Brian_Earl_Spilner 's suggestions to prevent future problems. I also have a Roth IRA with NFCU that is more than sufficient to cover any missed payments, so *maybe* that's why they weren't ready to drop the hammer and cancel the CC even if it was a bounced payment.

One complication is that NFCU is not my primary financial institution, so I don't normally keep large amounts of money in my NFCU checking account. The closest branch is 100 miles away, which makes cash deposits ridiculously difficult. Other than this experience, I've usually enjoyed working with them. If I did keep my primary checking account with them, this probably never would have happened.

The CLOC is a favorite here. It requires a credit pull, but can be grown to $15k. Upside is it counts towards lowering your credit card utilization. Down sides are it's a new credit account, starting limits aren't very big right now, and it's a hard pull whenever you try to grow it.

Re: NFCU handling of past due CC accounts

W261w261 — Sun, 30 May 2021 13:39:04 GMT

It was NFCU that had the "rather unfortunate experience" with you. From time to time on here, there are members who walk too close to the edge, make a miscalculation and go over, and then feel that since their oversite was minor, so should NFCU's reaction be. If I understand your situation, you had no safeguards in place (which are readily available at NFCU) to cover an overdraft situation. I assume now you're going to do that. But in my opinion this was an "accident" waiting to happen. Although the amount involved was "trivial," that also implies that you were leaving yourself with a trivial balance in your account. The nearest branch may be 100 miles away, but wire transfers, although expensive, go through in hours, and you can also make mobile deposits to your Navy account if you have a paper check on your primary account.

As others have pointed out here, you're actually lucky that Navy is more tolerant. It may be just a few bucks, but the implication implied by the experience, while unknown exactly to us, could range from a slap on the hand (which sounds like what you got), to a little black mark which could manifest later in ways that you don't know yet.

Computers are simple creatures in many ways. They do what they're told. Whatever you did, big or small, to one degree or another you've put yourself in a place that has an unpredictable outcome, and I don't think you want to be there. I'm sorry if this comes off as too judgmental, but I think it's important going forward that you don't play it so close. Everybody that does goes over at some point, and these days the UW seem to think that if you are close to the line on one hand and also careless enough to not keep yourself from going over, that that means maybe you're not the kind of person they should trust as much going forward, or sometimes the kind of person they'd rather not do business with.

Re: NFCU handling of past due CC accounts

gingerflower — Sun, 30 May 2021 18:47:46 GMT

@Brian_Earl_Spilner I agree with your statement. Maybe OP does not know there is Oops and Cloc to apply for Overdraft protection. However, if you have Oops you cannot apply for Cloc. OP I would definitely apply for Oops or Cloc to cover Insufficient funds.

Re: NFCU handling of past due CC accounts

Anonymous — Sun, 30 May 2021 19:37:16 GMT

@Brian_Earl_Spilner wrote:
@8bitmachinegun wrote:
I've messaged NFCU for clarification on whether this was a missed or bounced payment, and also inquiring about ways to prevent it. So hopefully I can use one of @Brian_Earl_Spilner 's suggestions to prevent future problems. I also have a Roth IRA with NFCU that is more than sufficient to cover any missed payments, so *maybe* that's why they weren't ready to drop the hammer and cancel the CC even if it was a bounced payment.

One complication is that NFCU is not my primary financial institution, so I don't normally keep large amounts of money in my NFCU checking account. The closest branch is 100 miles away, which makes cash deposits ridiculously difficult. Other than this experience, I've usually enjoyed working with them. If I did keep my primary checking account with them, this probably never would have happened.
The CLOC is a favorite here. It requires a credit pull, but can be grown to $15k. Upside is it counts towards lowering your credit card utilization. Down sides are it's a new credit account, starting limits aren't very big right now, and it's a hard pull whenever you try to grow it.

This is great in theory but they stopped dishing out $15K CLOCs unless you're active duty or have direct deposit (and direct deposit isn't always a guarantee either). They have been giving $500 limits and then refusing to increase them, wasting a HP in the process.

Re: NFCU handling of past due CC accounts

Brian_Earl_Spilner — Sun, 30 May 2021 20:00:58 GMT

@Anonymous wrote:
@Brian_Earl_Spilner wrote:
@8bitmachinegun wrote:
I've messaged NFCU for clarification on whether this was a missed or bounced payment, and also inquiring about ways to prevent it. So hopefully I can use one of @Brian_Earl_Spilner 's suggestions to prevent future problems. I also have a Roth IRA with NFCU that is more than sufficient to cover any missed payments, so *maybe* that's why they weren't ready to drop the hammer and cancel the CC even if it was a bounced payment.

One complication is that NFCU is not my primary financial institution, so I don't normally keep large amounts of money in my NFCU checking account. The closest branch is 100 miles away, which makes cash deposits ridiculously difficult. Other than this experience, I've usually enjoyed working with them. If I did keep my primary checking account with them, this probably never would have happened.
The CLOC is a favorite here. It requires a credit pull, but can be grown to $15k. Upside is it counts towards lowering your credit card utilization. Down sides are it's a new credit account, starting limits aren't very big right now, and it's a hard pull whenever you try to grow it.
This is great in theory but they stopped dishing out $15K CLOCs unless you're active duty or have direct deposit (and direct deposit isn't always a guarantee either). They have been giving $500 limits and then refusing to increase them, wasting a HP in the process.

Do you normally overdraft your account by more than $500?

Re: NFCU handling of past due CC accounts

Anonymous — Sun, 30 May 2021 20:06:43 GMT

@Brian_Earl_Spilner wrote:
@Anonymous wrote:
@Brian_Earl_Spilner wrote:
@8bitmachinegun wrote:
I've messaged NFCU for clarification on whether this was a missed or bounced payment, and also inquiring about ways to prevent it. So hopefully I can use one of @Brian_Earl_Spilner 's suggestions to prevent future problems. I also have a Roth IRA with NFCU that is more than sufficient to cover any missed payments, so *maybe* that's why they weren't ready to drop the hammer and cancel the CC even if it was a bounced payment.

One complication is that NFCU is not my primary financial institution, so I don't normally keep large amounts of money in my NFCU checking account. The closest branch is 100 miles away, which makes cash deposits ridiculously difficult. Other than this experience, I've usually enjoyed working with them. If I did keep my primary checking account with them, this probably never would have happened.
The CLOC is a favorite here. It requires a credit pull, but can be grown to $15k. Upside is it counts towards lowering your credit card utilization. Down sides are it's a new credit account, starting limits aren't very big right now, and it's a hard pull whenever you try to grow it.
This is great in theory but they stopped dishing out $15K CLOCs unless you're active duty or have direct deposit (and direct deposit isn't always a guarantee either). They have been giving $500 limits and then refusing to increase them, wasting a HP in the process.
Do you normally overdraft your account by more than $500?

No I do not but I'm not a big spender either. Since it's a revolving account it's also my lowest limit. I just think it's important to point out that it's only $500 now and may be stuck at $500 too.

Re: NFCU handling of past due CC accounts

8bitmachinegun — Mon, 31 May 2021 06:28:36 GMT

So there have been a couple of interesting developments. Below I've pasted NFCU's very cordial, yet somewhat uninformative response to my inquiry as to whether this was a 'missed' or 'bounced' payment, and there was no mention of OOPS or CLOC.

Your Message 05/26/2021 : Can you please cancel the two pending transfers for $xxx each ($xxx total.) I need to reallocate those funds for my NFCU Mastercard.

Navy Federal Response 05/27/2021 : Thank you for your eMessage, Mr. [REDACTED]. A review of your transfer activity shows that two $xxx transfers were made from your EveryDay Checking account on 05/26/2021. You have indicated that you needed both of these transfers cancelled so that they can instead be sent to your MasterCard ending in xxxx; however, we would like to advise you that one of these transfers was already sent to the MasterCard.

We are happy to withdraw the funds from your IRA. [removed some tax requirements]

Your Message 05/27/2021 : Thanks for your response. I’ve already taken care if this issue and no further action is required.

Navy Federal Response 05/27/2021 : Thank you for your follow-up eMessage, Mr. [REDACTED]. We realize that you have many options for your finances and appreciate the fact that you choose Navy Federal. We greatly appreciate your taking the time to write us, and look forward to serving you for many more years to come.

Your Message 05/29/2021 : Thanks for turning an unpleasant experience into a positive one. I appreciate NFCU's assistance in sorting this issue out.
There is one matter I'd like clarification on for future reference. Was this a *missed* payment or a *bounced* payment? I'm not exactly sure how a scheduled transaction is handled in an NSF scenario. Is the transaction simply discarded and never happens, or is it essentially a 'bounced check'? Is there any way to avoid this in the future?
Thanks again.

Navy Federal Response 05/29/2021 : Thank you for your inquiry, Mr. [REDACTED]. We see the payment is up to date for your Credit Card and there was no late fee. The next payment for $xxx.xx is due on 06/21. If you have further questions, please let us know.

So this is a very friendly interaction, yet there was no mention of missed vs. NSF payments, or how to prevent them. It seems oddly conciliatory if it was indeed an NSF scenario.

As for overdrafts, I *assumed* when I opened an NFCU checking account that this would work like every other bank account I've had. IOTW, if I overdrew the bank would at its whim either honor the transaction or decline it, and bill me a $35 overdraft fee regardless. Now that I know NFCU does things differently, I'll probably sign up for OOPS (apropos name.)

And then tonight I went to a local fast food restaurant, and had both my [non-NFCU] debit and Amex card declined. But both were well funded and I had no problems going to a nearby ATM and withdrawing the necessary funds for my meal. Is there any chance that the declines were related to this whole mess?

Re: NFCU handling of past due CC accounts

W261w261 — Tue, 01 Jun 2021 15:53:50 GMT

It's been a couple of years since I used a debit card, but I remember declines unrelated to the balance on the account, as both the business and personal accounts were declined with plenty of funds in them. I took that to mean a comm issue on the bank or payment network side, as another card went through.

Re: NFCU handling of past due CC accounts

8bitmachinegun — Fri, 04 Jun 2021 03:03:23 GMT

I got a very terse form letter yesterday from NFCU explaining that since I did not have sufficient funds in the account (due to a couple of pending transfers), the payment was not made. It did not specify that the payment had bounced, simply that it was not applied to the CC. It seems I have this set up as a "Bill Pay" sort of transaction (i.e., it is pushed from the checking account to the CC, NOT an automatic withdrawal initiated by the CC.) Thus it was considered a missed, not bounced, payment.

I guess this explains why NFCU didn't drop the hammer on me and cancel the card, or take other action. Or maybe they're just nice folks.