US Bank Overdraft Protection/ "Reserve Line"

[Anonymous]

Argh!

Got home from work the other night to find a voicemail from a guy from my branch of US Bank (a branch it's pretty much impossible to actually visit in person anymore as it's right next door to where we used to live - very useful when I'd just moved here and didn't have a job, not so much now we live miles away from it and work even farther away still!), all very cryptic-but-friendly-sounding and asking me to call him back. For some reason the fact it was actually a call from a real live person at the branch as opposed to some random person made me think it might not just be the usual telemarketing stuff, and so I wanted to call to check everything was ok, etc. Long story short, I called the main customer service number as it was too late to call the branch, and the CSR I spoke to (correctly, as it turned out) surmised that the guy had been calling to get me to sign up for overdraft protection. 

I'm from the UK, and overdrafts etc work a bit different over there - the whole thing (attaching it to a credit card or savings account, etc etc etc) is a bit of a mystery to me - in the UK you either have an overdraft (ie an amount by which you are allowed to overdraw your account without penalty - mine was fee-free and had a very, very low interest rate for using it) or you don't, end of story - the bank just sets it up at the time of opening the account. It's just pretty much a given, really. So... when the CSR was waxing lyrical about how terrible it is that I don't have one and how I should, blah blah blah, how it's free, and it's just like insurance that doesn't cost anything at all unless you use it, I was just thinking "so what, set the thing up for me then, why are you going on about it?!" - so she asked if I'd like her to set it up, and I thought "why not?", all very absentmindedly as this isn't even the account we use on a day-to-day basis, there's about a zero per cent chance that we'll ever overdraw the thing anyway, and I just wanted to get off the phone!

So... didn't think anything more of it... but then I got an alert from CreditSecure about an inq on Experian. Argh! As if my EX didn't have enough inqs on it already (thank you Time Warner, thank you Duke Energy, thank you Verizon, and everyone else who's harded me on Experian when I wasn't actually applying for credit as such), just what I wanted! Then I logged in to the US Bank site and see that I now have a "Reserve Line/Business Reserve Line" of $4,000 (um, I thought it was just supposed to be a little breathing space rather than some line of credit almost twice as big as the limit on my US Bank Visa...?!)

Soooo... after all that preamble, I am disgruntled with the inq, although I suppose I'll have to take it on the chin - it would have been nice if the CSR had told me at any point that this would involve a credit check, as that would have woken me up, stopped me just going along with her spiel to get her off the phone, and caused me to say that I most certainly didn't want anything that would involve a hard inquiry, thank you very much. Unfortunately, she never did mention it, so I didn't get the chance.

My actual question, if anyone is still reading, is... is this going to show up as a new account on my credit reports? And if so, what effect (other than score-lowering because of new account/decreased AAoAs) will it have?

Ugh... I don't WANT a new account!!! 

[Anonymous]

Of course it will show up as a new account.  Why wouldn't it?   My Wells Fargo ODLOC does.

Don't worry, cupcake;  there are worse things in the world than a new account. 

[Anonymous]

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@Anonymous wrote:

Of course it will show up as a new account.  Why wouldn't it?   My Wells Fargo ODLOC does.

Don't worry, cupcake;  there are worse things in the world than a new account. 

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I don't know why it would, or wouldn't, which is why I was asking.  

[fishbjc]

Yes, it will show up on your CR.  If you don't use it, or use a little of it...it should add to your overall credit portfolio.  A 4k line may be a *good thing*.  In todays credit climate, having this may end up being a blessing.

Most banks in the US will run a hard inquiry on you for opening a checking account and/or savings account (fyi).

I say keep it open, the inquiry was done.

[Anonymous]

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@fishbjc wrote:

Yes, it will show up on your CR.  If you don't use it, or use a little of it...it should add to your overall credit portfolio.  A 4k line may be a *good thing*.  In todays credit climate, having this may end up being a blessing.

Most banks in the US will run a hard inquiry on you for opening a checking account and/or savings account (fyi).

I say keep it open, the inquiry was done.

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Thank you.

 

I had Googled a bit the other night after seeing the inquiry and had found some people saying that SOME banks don't report these lines of credit to the CRAs. Couldn't find out for definite whether US Bank would be one of those or not, though! I suppose, thinking about it, that it would make sense... but it's just not "what I'm used to" so it hadn't even occurred to me - and when I had the CSR telling me that they'd "noticed" I didn't have overdraft protection like it was some kind of error on my account that could be fixed with a couple of mouse clicks (and once I'd established that it was free if you don't use it, which I won't be doing!), I just thought sure, go ahead - if they'd said "we're going to run a check on your credit" that might have engaged my brain, but oh well! I was honestly thinking more in terms of them just agreeing that if you happened to mess up one month and have a $50 payment due to go out with only $49.98 in the bank, you wouldn't get hit with a ton of fees. Definitely wasn't thinking in terms of a $4000 line of credit...!

 

Oh well... silly thing is that that account isn't even my/our 'regular' checking account - I just keep it open as they have a branch in the building I work in so it's easy to go in there and deposit checks without the hassle of going to a branch of the bank we actually get our salaries direct-deposited into... there is no way in the world that I will EVER use the overdraft, not even one cent of that $4000!

 

I suppose you're right and (so long as it doesn't upset AmEx when it reports) it could be a good thing - it'll trash my already very young average age of accounts, but as I only have credit/store cards and a mortgage right now, I wonder if it might help in terms of credit mix.....?

 

We shall see! Anyway, thank you, fishbjc - and I guess there would be little point to closing it, what's done is done and all that! Just can't believe I've ended up with a new account when I'm very deliberately not applying for new accounts - if I was going to apply for something, I'd make sure it was something I actually wanted! Oh well! 

 

(sorry for another rambly post, btw!)  

[fishbjc]

Fev:  You're Welcome!  There is another type of overdraft that does NOT report.  It's tied to your credit card issued by the bank that has your checking account..  We have one small local bank that ONLY has this type of o/d offered.  If you have an o/d, they immediately toss it onto your credit card.

[Junejer]

Then, there's another kind that doesn't report. It just pays the checks, up to a certain $ amount and charges you a fee for the convenience. It doesn't charge interest on the amount nor a daily OD fee. I have one of those at one of my CUs.

[Anonymous]

NO NO NO, it does NOT show up on your credit.  I work at US Bank and also have my personal accts here. 

I just added the reserve line to my checking as protection for overdrafts, as I'm not that rich and run my checking almost down to zero every month.

The only time this line will show up on your credit bureau is if you default on it, and they have to come after you for the monies.  It is not like the credit card.

The debit card does NOT show up either.  Only ones that show up are the regular credit cards.

Just as your checking acct does NOT show up, this reserve line overdraft does NOT show up.

The inquiry to your credit is a hard hit, yes, but unless you've got something like 10/15 inquiries within one 6 month period, one inquiry is not going to do anything to your credit score.  Inquiries don't impact your score THAT much.

What impacts your credit score much much more is........... late payments over 30 days late, delinquency, chargeoffs, too much credit card debt and using too much of your available credit card lines.  I'd worry a heck of alot more about these things.

If you're clean, don't pay lates, pay everything on time, don't live on credit cards, this one inquiry from US Bank probably won't impact your score at all.

Late answer to the question, but maybe someone else will read this at some point,s ince I've obviously read it today.

[Imhotrodcrazy]

I have a US Bank CC and LOC.  They are both reported to all three CRB's for me.  Since they are substantial lines, they sure help my over all utility.  In addition, I have had my mortgage with them along with my checking acct.  They are the #1 bank that I deal with.  Both of these accts are tied to my checking acct as overdraft protection.

[clumsymoon]

Actually, the reserve line DOES show up on your credit report. I have never defaulted on it, either, it has reported from day 1.  I was kind of annoyed by this as well, because it was not explained to me when I got overdraft protection. You are right, it is not reported as a credit card. USBank considers the reserve line a personal loan (they explained this to me later).

Worth considering; my mother was on my account when I started college so that she could withdrawl and deposit money for me (I was in another town), so the reserve line also shows up on HER account. I have just recently removed her from my bank account, but USBank informed me that there is no way to remove my mother from the reserve line other than closing the reserve line. If I want a new reserve line, I have to open a brand new bank account with them. I won't be opening another reserve line anyways because I do not want the overdraft protection - the interest rates are horrible. You are better off attaching a usbank credit card to cover you in case of overdrafts, or just be careful not to get them in the first place. I believe USBank forgives one overdraft fee a year.