First, here is a good thing to do if you use credit cards: Arrange for an automatic payment, equal to the minimum amount you charge to that card in a typical month, to be electronically transferred from your bank account on a day before the payment is due. That way, if the e-mail reminding you to check your paperless billing gets into your spam folder, or if your paper bill gets lost behind the couch, at least part of your bill will be paid and you won’t get the full late fee. Write the automatic payment in your bank account register in advance so you’ll remember to keep at least that much in your account. Ideally, you’ll also remember to check your bill and pay any additional charges before the due date, and then you won’t pay any interest at all! (If your charges for the month are less than the automatic payment amount, your credit card company should take only the amount you owe–check to make sure this is the policy.)
I set up an automatic payment for my Visa card a few years ago, when my son was in preschool and his tuition was charged to that card, so I set it at $400 transferred on the 11th of each month. It had always worked out well for me . . . until last month.
My bank was bought out by another bank, closed 3 of the 4 locations that were convenient for me, and instituted some annoying fees. I decided to open a new checking account at the bank that is now operating in all 3 of those locations and also has no fees for using other banks’ ATMs. I kept my old account open to allow checks to clear and allow time for switching over electronic payments.
Wednesday, November 9, I wrote a check on my old account and deposited it into my new account. I noted this in my register and calculated my balance as $1,577.30.
Friday, November 11, during my lunch break at work, I checked my Visa account online and found that I needed to pay an additional $392. Knowing that electronic transfers are made shortly after midnight, and seeing that the usual $400 payment was already credited to my bill, I assumed that the payment already had been transferred from my old account. I now had less than $392 left in the old account. Therefore, I decided to change my “preferred account for future payments” to my new account and then to authorize an electronic transfer of $392 to be made on Monday, November 14, from that account.
Things Not To Do:
- Don’t forget about bank holidays when dealing with banks. They get lots of holidays that ordinary office workers do not. They take every opportunity to use their holidays against you.
- Don’t assume that when a transaction appears in a computer-generated account statement, it is in fact a completely done deal.
- Don’t forget that when you are a new customer, a bank will delay crediting deposits to your account, even if the deposit is a check that you wrote to yourself from your other account in a different local bank.
- Don’t forget that both banks and credit-card companies make all their money by tricking customers into doing things for which they can charge fees.
Monday, November 28, I received both a letter from my Visa card and my first statement from my new checking account. The letter said that my bank had “refused to complete” an electronic payment, so please contact Visa to arrange another payment option. I was very annoyed–I had more than $392 in my account, and when I was setting up the account the lady at the bank specifically asked if I wanted to authorize electronic transfers out of the account and I said yes, so what was the problem?! I opened the bank statement. It said they had paid $400–not $392–to my Visa on November 14, and then the next line said they had charged me a $35 fee for some gobbledygook something Visa. What?!
I called Visa. Both transfers–first $400, then $392–had been attempted on my new checking account on November 14. The bank had refused the second transfer. Visa had charged me a $25 fee for this.
“But!!!” I said, “I had way more than $792 in my account!” The Visa person told me the bank had not given them an explanation of why it wouldn’t pay; I’d have to take that up with the bank. “Okay, but why was the $400 payment already on my statement as received by you on the 11th if you actually didn’t ask them for it until the 14th?” Because Visa puts the payment on your statement when they initiate the transfer–they don’t wait to make sure it goes through–and November 11 was Veteran’s Day, a bank holiday, so the request was hanging in cyberspace until the bank opened. During that time, insanely enough, my authorization to change my “preferred account for future payments” actually moved that pending request from the cyberspace outside my old bank to the cyberspace outside my new bank!!!
I called my new bank. The person confirmed that on bank holidays they do not open their cyber-doors to any sort of request, even those that can be processed entirely by computers, because computers also have a day off to honor our veterans, despite what the ordinary citizen might think from walking past the bank and seeing through the window a lot of computers that were not allowed to go home and wear fuzzy slippers or even to shut down and rest. “Okay, but I deposited $1,000–which is more than enough to cover both transfers–five days before you processed the transfers!” Right. But because I am a new customer, they held the check for two business days after deposit: Thursday and Monday. The electronic transfers were attempted Monday just after midnight, when the computers returned from vacation; the check was deposited Monday at 5pm.
Although I grumbled quite a bit to the bank person, I had to admit that all of these policies were spelled out in the half-inch thick stack of paper I had been handed when opening my account. But none of this would have been a problem if Visa had switched my “preferred account” at the point when I thought it had: $400 from the old account, $392 from the new one.
I called Visa again. I explained the whole thing to somebody and then to her supervisor. Ultimately the supervisor agreed that the Web interface had misled me about when the $400 transfer was happening. She waived the $25 fee because I “have been such a responsible customer”–which is nice to hear, but gee, regardless of my track record with this card, I think I deserve not to be penalized for believing that a payment already credited to my account was not going to be suddenly redirected to a different bank!!!
Well. Live and learn. Visit Works-for-Me Wednesday to learn about lots of other things!