Discover, 2 returned payments. Scared??? What will happen next???

[Anonymous]

I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

[UncleB]

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@Anonymous wrote:
I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

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Many banks don't allow ACH debits to savings accounts since doing so in effect turns it into a checking account (since many people don't use paper checks these days, anyway).

At the risk of reigniting the push/pull debate, I second the suggestion by @Sloedough to push payments to Discover for a while.  When you push a payment using your bank's billpay if something goes wrong (mis-keyed account number, etc.) the payment will just fail, nothing 'bounces'.  Assuming you don't wait until the last minute to initiate the payment you have a chance to 'fix' any errors, and Discover will be none-the-wiser.

Of all issuers Discover is likely the most lenient with this type of thing, and I'm hoping they will be able to work with you on getting the issue straightened out.  Please follow-up with us and let us know how it turns out. 

[Anonymous]

I'm not at risk of being late or anything. The minimum payment was made at the beginning of the month so I am good there. This payment was just to bring my balance back down. I was literally $2 from my credit limit which leads me to my next question. When they report my highest balance, will it have a negative affect on my credit because I came so close to my limit even though I pay it back down within the same billing cycle? I noticed from my short time with capital one that the high balance is listed on that account on your credit file and is there to stay.

[Sloedough]

That's actually a good thing. Using most of your CL and PIF makes you a prime canidate for a CLI.

[Shooting-For-800]

I would call your bank and figure out over draft protection.

I would change bank if they did not cover a simple minor mistake like that.

I would call Discover and explain the situation.

GL!

[Cred4All]

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@Anonymous wrote:
I was literally $2 from my credit limit which leads me to my next question. When they report my highest balance, will it have a negative affect on my credit because I came so close to my limit even though I pay it back down within the same billing cycle?

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Having any balance on a card over 28.9% utilization does have an effect on your score yes.  If this was your largest open credit line, and it's most likely 98% utilized, then the credit score would reflect that with a much lower score and added credit risk.   This is not the end of the world however, as utilization is the fastest and easiest way to improve your score as you probably know. 

If your statement does cut with that balance, just be sure to PIF as you originally planned and it will not be long until the score is updated to reflect that.  As the other poster stated here, having the statement cut and PIF looks good (even with a slight/moderate ding to your score) as it shows you worthy in time of a higher CLI.  Unless you're immediately worried about the AZEO method and are aiming for another loan or card, don't worry about the statement showing a balance at this moment.

[SBR249]

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@UncleB wrote:

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@Anonymous wrote:
I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

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Many banks don't allow ACH debits to savings accounts since doing so in effect turns it into a checking account (since many people don't use paper checks these days, anyway).

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I'm not sure that's truly a reason. By law savings accounts are limited to 6 withdrawals per month after which the account holder can be penalized. That's usually a pretty good deterrent to keep people from being too active with pulling money out. If an account doesn't allow ACH transfers that would severely limit the ways in which you can pull money out even legitimately. I mean unless I'm mistaken you'd be limited to internal transfers to another account at the same institution, actually physically withdrawing money at a branch or ATM (if enabled), or wiring the money out which incurs hefty fees. I can't imagine that a savings account like that would be very useful 

[UncleB]

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@SBR249 wrote:

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@UncleB wrote:

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@Anonymous wrote:
I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

---

Many banks don't allow ACH debits to savings accounts since doing so in effect turns it into a checking account (since many people don't use paper checks these days, anyway).

---

I'm not sure that's truly a reason. By law savings accounts are limited to 6 withdrawals per month after which the account holder can be penalized. That's usually a pretty good deterrent to keep people from being too active with pulling money out. If an account doesn't allow ACH transfers that would severely limit the ways in which you can pull money out even legitimately. I mean unless I'm mistaken you'd be limited to internal transfers to another account at the same institution, actually physically withdrawing money at a branch or ATM (if enabled), or wiring the money out which incurs hefty fees. I can't imagine that a savings account like that would be very useful 

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At the risk of getting off-topic, it seems to often be YMMV with savings accounts and ACH pull debits... the couple that I have (at different banks) both don't allow ACH pulls initiated by an outside source; all ACH transactions have to be initiated with the bank itself.  In addition to the six withdrawal per statement limit it's the main difference between their savings accounts and transaction (checking/DDA) accounts.

In any case, if one wants to go that route they need to practice due-diligence and check with the bank/CU in advance and not just assume it is allowed, since it's not guaranteed to be.

[UpperNwGuy]

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@SBR249 wrote:

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@UncleB wrote:

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@Anonymous wrote:
I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

---

Many banks don't allow ACH debits to savings accounts since doing so in effect turns it into a checking account (since many people don't use paper checks these days, anyway).

---

I'm not sure that's truly a reason. By law savings accounts are limited to 6 withdrawals per month after which the account holder can be penalized. That's usually a pretty good deterrent to keep people from being too active with pulling money out. If an account doesn't allow ACH transfers that would severely limit the ways in which you can pull money out even legitimately. I mean unless I'm mistaken you'd be limited to internal transfers to another account at the same institution, actually physically withdrawing money at a branch or ATM (if enabled), or wiring the money out which incurs hefty fees. I can't imagine that a savings account like that would be very useful 

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All my three of my savings accounts are like that, and I find them to be quite useful -- for saving, which is what such accounts are for.  I do all my bill-paying from my checking account.  If I run low in my checking account, which happens at most twice a year, I transfer money from savings to checking and then pay the bill.

[SBR249]

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@UpperNwGuy wrote:

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@SBR249 wrote:

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@UncleB wrote:

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@Anonymous wrote:
I called them and told them direct to expect an ACH debit from discover card. Because it was a large amount and it is outside of my normal activity I wanted to make sure it would go smoothly. That's when I was informed that they did not allow ACH debits and it would be returned. They told me that in the future I should set up bill pay to pay that account.

---

Many banks don't allow ACH debits to savings accounts since doing so in effect turns it into a checking account (since many people don't use paper checks these days, anyway).

---

I'm not sure that's truly a reason. By law savings accounts are limited to 6 withdrawals per month after which the account holder can be penalized. That's usually a pretty good deterrent to keep people from being too active with pulling money out. If an account doesn't allow ACH transfers that would severely limit the ways in which you can pull money out even legitimately. I mean unless I'm mistaken you'd be limited to internal transfers to another account at the same institution, actually physically withdrawing money at a branch or ATM (if enabled), or wiring the money out which incurs hefty fees. I can't imagine that a savings account like that would be very useful 

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All my three of my savings accounts are like that, and I find them to be quite useful -- for saving, which is what such accounts are for.  I do all my bill-paying from my checking account.  If I run low in my checking account, which happens at most twice a year, I transfer money from savings to checking and then pay the bill.

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My point isn't to say that savings accounts should be used for bill paying, but I think the ability to draw money out of it with an ACH pull from an external account is an important feature. I don't have checking accounts or any other accounts at the majority of places where I do have savings accounts, especially at online-only institutions with high-yield savings accounts. But I guess I didn't differentiate between ACH pushes and pulls (didn't know that made much of a difference). But we are getting off topic.