Applied Bank - Help!

[bluefoxing]

I was approved for a Applied Bank secured credit card. I put $500 down to receive a $500 credit limit.

I fell behind on payments (wont bore you with the sop story) and called them to close my account after confirming that the $500 deposit would be credited towards my balance and the balance sent on my next statement for payoff. This was agreeable to me, as then I would only owe a small $50 balance which I intended to pay off in full.

This did not happen. No letter. Nothing. Never able to get anyone on the phone. No letters. No statements.

This month I pulled my credit report and found they had reported it as a collection of $672. I am livid! It has been 5 months since closing that card, and I have not seen a return of my $500 original deposit nor a change in the balance. Are they just keeping the $500? What are the rules here? Does it forfeit since the account was closed? I don't understand.

Please help!

[NonSufficientFunds]

Unfortunately, I think it is too late.  Your credit report is probably ruined, for now.

The policy of Applied Bank is to refund your security deposit only AFTER you have paid off your outstanding balance.  The security deposit is considered to be collateral, and can not be applied toward reducing the amount owed.

Since you stopped making regular payments, the account went into default - leading to it's assignment to a collection agency.

The collection amount of $672 is probably a combination of over-limit fees, late fees, annual fees, and interest on the total balance.

The terms of your agreement state that if the account goes into default, you forfeit your deposit funds, and the bank has the right to apply such funds to mitigate the losses incurred from the default.

Even if the bank decides to keep your money, they can still assign the account to a collection agency which can persue you for the full amount of the outstanding balance, plus interest.  And the negative mark will stay on your credit report for another seven years, making it even more difficult to establish credit in the future.

Unfortunately, this is a trap that too many people fall into when starting out with secured credit cards, and it should serve as a cautionary tale to others who are beginning their credit journey.

The moral of the story is very clear: DON'T MISS ANY PAYMENTS - The costs are greater than you realize.

[bluefoxing]

Ouch. That is painful to hear.

It's not even a year old so I'm worried if I reach out to them they'll sue me.

I do have the full $672 and can pay in full. Can I do a PTD with them? Offer to pay in full if they remove it from my credit?

[tattooedhusker]

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@bluefoxing wrote:
Ouch. That is painful to hear.

It's not even a year old so I'm worried if I reach out to them they'll sue me.

I do ha e the full $672 and can pay in full. Can I do a PTD with them? Offer to pay in full if they remove it from my credit?

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There is no harm in trying a PFD. The worst they can say is no!

[bluefoxing]

I took a second look at my credit report.

Account Type : Revolving

It says the account status is Closed

Balance shows $0.00 for both EX and TU (not reporting to EQ)

Payment Status : Paid, was past due 90 days/Paid or paying as agreed.

I think right now the only negative its showing is the 90 days past due and the fact that I closed it... and it is not an actual collection? Maybe there is still time to salvage this?

[NonSufficientFunds]

Well, that's Good News!!  It looks like the situation is not as bad as your OP first suggested.

Although the "Payment Status" of 90 days past due, will probably remain on your Experian for awhile, I think you still have time to prevent the account from going into collections.

If you have the $672 available, and can pay it in full: do it immediately.

You will have to hand over the money sooner or later, anyway - so you might as well do it now, while there is still the chance to save your credit report.

I don't know if Applied will actually "fix" the negative entry, but at least when they have settled the account as "Paid in Full", they have no reason to do any more damage.

After you make everything right with them, try talking to the CSR to see what is required to get your deposit returned.  Since the account has not officially entered the collection phase, you should be able to get your money back - it is still technically a savings account that still belongs to you.

Good Luck & Please keep us updated - there are lots of folks in the same predicament.

[bluefoxing]

I am happy to already report good news!

I called Applied Bank to inquire about the status of my account and set up a payment or whatever needed to be done to avoid collections.

The creditor said that my balance when I requested to close the account was $507.90 and is not in collections at all nor would it be. The $672 was just a high balance I had at one point, but it was not where it was when it closed out.

What they did was apply my $500 deposit towards that balance and refunded the $7.90 back to themselves (it was a monthly fee charged by them) which left me at a $0 balance. I reconfirmed with her that I don't owe them anything (even the $7.90 which I was most happy to pay) and nothing is going into collections.

The 90 day will stay on my report... but maybe I can try to get that taken off later when its older.

Looks like I missed getting hit by that train by a hairs-width!

[NonSufficientFunds]

This is GREAT NEWS - What started out as a bad day, turns out to be a good one - Congratulations !!

Never forget the pain and anxiety that this episode has caused you... It will make you stronger in your resolve to NEVER fall behind.

Your credit management skills will grow stronger from this experience, and the one "90-Day Late" will shrink in significance as time goes by.

Best Wishes, and Good Luck on your journey to a strong credit standing !!

[bluefoxing]

Just an update on this...

I called Applied Bank and got their fax number today. I faxed over a goodwill request, asking they remove the 90 day late payment. In the entire year I had the card, I was only late the once, a consecutive 3 months, due to hospitalization and I forgot to pay my bill. I even brought it current and remained in good standing up until I requested it closed a year later as I falsely was told it would be better to close it. (not by anyone here).

Crossing my fingers and hoping for a GW remove of the late.

[tattooedhusker]

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@bluefoxing wrote:

Just an update on this...

I called Applied Bank and got their fax number today. I faxed over a goodwill request, asking they remove the 90 day late payment. In the entire year I had the card, I was only late the once, a consecutive 3 months, due to hospitalization and I forgot to pay my bill. I even brought it current and remained in good standing up until I requested it closed a year later as I falsely was told it would be better to close it. (not by anyone here).

Crossing my fingers and hoping for a GW remove of the late.

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Good luck!