Logic is Ruining my Credit Rating

[Virgil Showlion]

Bank: Hello, sir. How may we help you?
Virgil: Hello. My line of credit is refusing to allow me to transfer to the business chequing account.
Bank: Let's see. It says here that you're two cycles delinquent in your payments. You have $11.50 in unpaid interest charges.
Virgil: But it took the interest charges out of the LOC. It shows the balance on the account to be $111.50, which I assumed was the $100.00 I used plus $11.50 in interest.
Bank: Oh no, the $11.50 is shown as part of the $111.50 because it's owing, but it has to be paid back.
Virgil: *sigh* OK. So how do I pay it?
Bank: Just transfer the funds in from your business chequing account.
Virgil: So I transfer $11.50 from my chequing account into the LOC, and then I can transfer another $100 out of the LOC into my chequing account?
Bank: Yes. But you'll have to wait 3-5 business days before you take the money out for our records to reflect that you're no longer in arrears.
Virgil: Can I set it up so that it automatically pays the interest every month?
Bank: We can set it up so that a certain amount is transferred from your chequing account into the LOC every month. How much do you want that to be?
Virgil: The amount of interest owing.
Bank: We can't do that. It has to be a fixed amount.
Virgil: OK. Since I need it to cover the interest charges for a larger outstanding balance, let's make it $50.00 a month out of my chequing account. But if my monthly interest charges exceed $50.00, I'll fall back into arrears again, correct?
Bank: If you don't pay the outstanding interest above the $50.00, yes.
Virgil: Is there any way I can be notified in my online banking that the LOC has a missed payment?
Bank: Only that it will refuse to withdraw money from the account. But I wouldn't advise that, since it will negatively affect your credit rating.
Virgil: So you're telling me this is a fully-automated machine to destroy my credit rating unless I intervene each and every month to transfer funds out of the business chequing account into the LOC, which is the exact opposite of the reason I got it? And there's no way to change that?
Bank: That is correct.
Virgil: Thank you.
Bank: We'll also need you to come in a sign some papers for the pre-authorized payments. Would Monday afternoon be a good time to waste doing this?

(Incidentally, don't ask me why I got the LOC. It wasn't my idea, and I'm beginning to see why.)

[Jaguar]

Virgil you need to start doing coupons and sales now. See ya at No-Frills.

[busymom]

Two words, Virgil.  Credit union.    You're welcome.  (I tend to avoid the big banks, because they're the ones who mess with you.)

[Virgil Showlion]

Mar 8, 2013 15:25:47 GMT -5 busymom said:

Two words, Virgil.  Credit union.    You're welcome.  (I tend to avoid the big banks, because they're the ones who mess with you.)

I'm beginning to suspect they're all run by sadistic chimps.

[lexxy703]

Can't you go online at a certain day of each month & pay the interest?  That is what I do, but I have to pay more than just the interest.  I have to pay a portion of the borrowed amount too.

[Virgil Showlion]

Mar 8, 2013 15:50:32 GMT -5 lexxy703 said:

Can't you go online at a certain day of each month & pay the interest?  That is what I do, but I have to pay more than just the interest.  I have to pay a portion of the borrowed amount too.

I can, and eventually I'll have to.

The point is that the whole process is a useless exercise of moving money from your right pocket into your left pocket back into your right pocket. It's pointless; it can't be automated; and it destroys your credit rating if you don't attend to it.

Things like this annoy us engineers to no end.

[Deleted]

Fire that bank. Their cash management system sounds terrible.

Disclosure: We use TDBank at work (a Canadian bank) and we are happy with their cash management and customer service.

[Bluerobin]

Even old fogies like I do online transfers for things like this.  Virgil, get a grip!

[wyouser]

Mar 8, 2013 16:22:12 GMT -5 ArchietheDragon said:

Fire that bank. Their cash management system sounds terrible.

Disclosure: We use TDBank at work (a Canadian bank) and we are happy with their cash management and customer service.

Much as you might like to...don't fire the bank...arson is illegal and will take away more than just a credit rating

[Virgil Showlion]

Mar 8, 2013 16:22:12 GMT -5 ArchietheDragon said:

Fire that bank. Their cash management system sounds terrible.

Disclosure: We use TDBank at work (a Canadian bank) and we are happy with their cash management and customer service.

To their credit, they're getting better. But yeah, I've thought about it.

[ՏՇԾԵԵʅՏɧ_LԹՏՏʅҼ]

I'm using ScotiaBank and more than happy with their system and management.

[Spellbound454]

I've got various accounts and ISAs but I wanted another current account to keep a bit a money in for making purchases off the internet.
...and that couldn't trace back to my savings.

....but

It was declined

I apparently don't have a credit rating because I don't owe any money.

What complete nonsense.....I'd have to be a good customer because I always pay bills.... but it seems not.

[Virgil Showlion]

Mar 8, 2013 18:00:15 GMT -5 Spellbound454 said:

I've got various accounts and ISAs but I wanted another current account to keep a bit a money in for making purchases off the internet.
...and that couldn't trace back to my savings.

....but

It was declined

I apparently don't have a credit rating because I don't owe any money.

What complete nonsense.....I'd have to be a good customer because I always pay bills.... but it seems not.

For the record, that's exactly why I got this LOC. I've never gone into debt. I pay off my credit cards monthly and prepay large purchases. And I was lucky enough to complete my degrees without taking on any student debt. Hence I was informed not long ago that I have no credit rating.

It's a stupid system, but understandable given how the banks make their money.

Now the instrument I bought for no reason other than to procure a credit history is giving me a bad credit history.

[Deleted]

Mar 8, 2013 19:08:11 GMT -5 Virgil Showlion said:

Mar 8, 2013 18:00:15 GMT -5 Spellbound454 said:

I've got various accounts and ISAs but I wanted another current account to keep a bit a money in for making purchases off the internet.
...and that couldn't trace back to my savings.

....but

It was declined

I apparently don't have a credit rating because I don't owe any money.

What complete nonsense.....I'd have to be a good customer because I always pay bills.... but it seems not.

For the record, that's exactly why I got this LOC. I've never gone into debt. I pay off my credit cards monthly and prepay large purchases. And I was lucky enough to complete my degrees without taking on any student debt. Hence I was informed not long ago that I have no credit rating.

It's a stupid system, but understandable given how the banks make their money.

Now the instrument I bought for no reason other than to procure a credit history is giving me a bad credit history.

Virgil,

You got to learn to play their game to win the system.  You are being too modest.

[TheOtherMe]

DF had enough cash to pay for his new car, but took out a LOC because he lives totally on cash.  He was afraid that since his house is paid off and he rarely uses a CC, he didn't have good credit even though he has large cash reserves.  He took out the LOC and is going to pay it off in 10 months.  Just wanted something recent on his credit report.  

What a game credit is.  Somebody who doesn't use it doesn't have a credit score to speak of.  Like he says, he was thinking if there was an emergency, he wouldn't be able to get credit, so he took out the LOC.