[strict9]

Ugh, saw this and checked. Yep, my mortgage payment taken out twice, with a plethora of overdraft protection notices afterward as it keeps taking money out of my other accounts.

Inertia, and the fact I don't want to lose a credit card acct I've had open forever, has kept me with WF. But those two are rapidly becoming nothing compared to all the BS from this bank.

[tzs]

Ah...overdraft protection. Useful if you would otherwise have bounced a check to a third party--but very annoying when the bad check is to your own bank!

My Bank of America checking account had overdraft protection that automatically would cover the overdraft from my Bank of America credit card.

I normally kept that checking account near zero, and would do a transfer from savings at the ATM to cover any checks I mailed that day. One day I didn't get around to doing that transfer and the check I had written that day bounced.

That check was to pay off my credit card bill, which I paid in full every month so as to not incur any interest charges.

Let's assume that I owed $200 on the credit card.

Result:

1. Check is not sufficient. The overdraft protection kicks in, and my credit card is charged $200 to pay off the $200 that was due on my credit card...so basically a no-op except...

2. I'm hit with an overdraft fee on the checking account, and a cash advance fee on the credit card.

The cash advance fee was quite a bit more than the interest would have been if I had simply skipped trying to pay the credit card bill that month.

The bank software really should be smart enough to recognize payments between accounts at that bank, and handle errors such as overdrafts more intelligently.

[forbiddenlake]

Don't close the credit card, but move everything else away, and put one bill on the card (or just use it twice a year for gum)?

[craftyguy]

I don't think you even need to do that? I had a wells fargo cc open for over a decade with only 1 charge in the previous 8 years. I closed it last year because, fuck wells fargo.

[cortesoft]

If there is no fee, keeping it open can help your credit score; a major factor for your credit is what percentage of your available credit you use, so having a credit card you don’t use simply adds to your total available credit.

[craftyguy]

Yes, I know of the reasons for keeping arbitrary credit accounts open, but the system is fucking stupid and I'd rather close accounts with banks/creditors that do stupid shit than give them an excuse for existing. Be the change you want to see, etc etc.

[cortesoft]

I mean yeah, but I want to buy a house soon. Me closing an account will have a negligible effect on the system but a large effect on my ability to get a mortgage.

[dronescanfly]

Honest question: Shouldn't credit be measured solely on the basis of currently available money and monthly income? (+how responsible you were with previous credit repayments)

I don't comprehend how having a cc but not actually using it leads to being trusted more

[toast0]

The credit scoring alhorithms don't look at historic balances for credit cards, just current balance and available credit, status and age of the account. Having an account open for a long time that isn't currently late is a proxy for 'has paid bills consistently' even if it may not be accurate. If you regularly were really late, the algorithm assumes your account would have been closed.

[gowld]

Not using available credit proves you aren't an addict. Addicts eventually can't keep up with their bills.

[cortesoft]

Depends on what you mean by 'should be'. Are you talking about what it morally should be, or what it should be based on historical patterns?

I am guessing that data has shown people who utilize less of their available credit are more likely to not default. Whether that is morally better or not is up to you.

As for the reason this is the case, I am guessing it has to do with resisting temptation and not living right at the edge of your means. Having credit but not using it shows that you have a buffer between where you are and destitution.

[astura]

You have credit available to you and you aren't maxing it out. You're exercised self control.

What you don't do with a credit line is just as important what you do with it.

[Mountain_Skies]

Depends on the issuer. Chase cancelled a MasterCard I had with them for lack of use. I kept it for those rare occasions where Visa and Amex weren't accepted and paid off the bill right away. To Chase my account probably wasn't worth keeping.