topic Re: checking account overdraft when making credit card payment in Understanding FICO® Scoring

checking account overdraft when making credit card payment

Anonymous — Sun, 25 Jan 2009 01:18:26 GMT

let's say you are making a payment towards your credit card balance, and you mistakenly put in too high of a number. The payment processing is initialized. You realize that you have inadequate funds in your checking accoun to cover the payment. What are the implications as far as how your credit card company will perceive you if 1) the payment is refused by the bank you have the checking account with because of inadequate funds

or 2) the payment goes through but you overdraft your checking account.

Will the credit card company somehow perceive you as being overextended now?

Re: checking account overdraft when making credit card payment

SCF — Sun, 25 Jan 2009 01:22:01 GMT

In case #2, the CCC should now know that you were overdrafted, but you may have trouble with your bank if you don't pay the fee or are having a lot of overdrafts.

In case #1, I doubt they would care if you were able to make a payment for the correct amount before your due date.

In either case, call the CCC and see if they can cancel the payment for you and then make a payment for the right amount using whatever means you have to for it to get to them on time.

Re: checking account overdraft when making credit card payment

Anonymous — Sun, 25 Jan 2009 02:08:09 GMT

thanks.

in your first sentence you meant "not" instead of "now", correct?

Re: checking account overdraft when making credit card payment

llecs — Sun, 25 Jan 2009 02:46:58 GMT

urgent_help_needed wrote:
let's say you are making a payment towards your credit card balance, and you mistakenly put in too high of a number. The payment processing is initialized. You realize that you have inadequate funds in your checking accoun to cover the payment. What are the implications as far as how your credit card company will perceive you if 1) the payment is refused by the bank you have the checking account with because of inadequate funds
or 2) the payment goes through but you overdraft your checking account.

Will the credit card company somehow perceive you as being overextended now?

1) If refused, and the check bounces, then the CCC could take any number of steps against you. I need to get, but don't have OD protection on our accounts. I did bounce a payment last spring to Juniper SeaMiles. I caught the mistake w/in 3-4 days and rapidly remade the payment. Juniper charged a fee of $35 or so and jacked my APR by 6%. It didn't bother me, and after all it was my fault and did PIF each month then. However, they have gradually reduced my APR by .25 to .50 points each month.

In another example, I went to BofA and asked that they transfer $$$ from my checking to the CC. The teller typed in the wrong payment amount and paid a whole lot more than the CL of the CC. The payment bounced and BofA closed my 99/500 after being opened for 2 months. I got on the bullhorn and shouted to everyone. Lobbied local branch managers to fight on my behalf. A couple days after receiving my closure notice due to the bounced payment, BofA reversed its decision and reopened the card without any harm to the account. Seemed harsh.

2) if the payment goes through, then the CCC won't know anything about it. You'd have to deal with the bank. Pay the OD and all would be OK. Bounced payments aren't reflected on your CR, unless you fail to pay the OD and it goes to collections. It could be referenced on your Chexsystems report though.

Re: checking account overdraft when making credit card payment

Anonymous — Sun, 25 Jan 2009 03:54:06 GMT

interesting....so do you know much about how this Chex system works?

Message Edited by urgent_help_needed on 01-24-2009 07:54 PM

Re: checking account overdraft when making credit card payment

llecs — Sun, 25 Jan 2009 05:52:40 GMT

Here's a link for the link:

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&message.id=17249&query.id=93264#M17249

Anything negative, related to banking, goes on your Chexsystems report which could include your past check ordering history, banking inquiries, bounced checks, overdraft activity, etc. Not everything reports though; you may see a lot of missing history (which isn't a bad thing).

Banks then tap into your Chexsystems report when you try to open a new account to check your history.

Re: checking account overdraft when making credit card payment

Anonymous — Sun, 25 Jan 2009 05:56:20 GMT

thanks for the info. so the only thing Chex would affect is if you get approved to open a savings or checking account? It won't count in determining whether you get approved for a credit card, the size of your credit lines, your credit scores, or anything else?

Re: checking account overdraft when making credit card payment

llecs — Sun, 25 Jan 2009 06:00:37 GMT

Generally, a Chex report isn't needed for a CC, CLI, etc. I do have two blemishes on my Chex report that prevented me from getting 2 CCs. Both were from CUs (CCCU & NASA FCU) where I was required to open a share savings account at the moment I was apping for their CCs. They saw those blemishes and denied the share account and the CC.

Re: checking account overdraft when making credit card payment

Anonymous — Sun, 25 Jan 2009 06:08:12 GMT

very interesting....I'm likely going to be getting a new card (Citi probably) to transfer a balance to on one of their 0% APR promotions, and I wonder if they will look at my Chex report during the approval process. I don't have any accounts with Citi, savings or otherwise.

Re: checking account overdraft when making credit card payment

llecs — Sun, 25 Jan 2009 06:18:21 GMT

With the exception of a few CUs, no other lenders, Citi included, look at your Chex report.