CREDIT CARD CONFIDENTIAL – An Insider Reveals How To Avoid Heartbreak, Wasted Fees & Identity Theft
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Moving Funds: Credit Card To Checking Account

In my last post I discussed the errors that credit card companies make. Mistakes typically fall into one of three categories: 

  • something that should happen doesn’t 
  • wrong information is generated by software
  • the wrong thing happens

But an agent can also be misinformed and tell a customer that something can be done, when it can’t.

One example of this kind of “agent error” happens when a customer is told he can do a “balance transfer”  over the phone and that he can transfer funds from his credit card (take out a loan on his credit card) and have those funds deposited into his checking account.

The agent may think this is possible because 1) the term “balance transfer” is now being used for transactions other than just transferring a debt balance from one card to another and 2) balance transfers are conducted over the phone.

But if a customer connects with an ill-informed agent who attempts to do a “balance transfer” of funds into that customer’s checking account then, although the agent will go through all the motions, the money will never transfer. This can have unfortunate consequences. 

Thinking that money will be available, the customer may write checks against his checking account only to have them bounce and incur steep insufficient funds charges.

So – if you want to transfer money (essentially take out a loan) from your credit card account and get that money deposited into your checking account, understand that this cannot be transacted through an agent. 

If you want to use a “balance transfer” to get funds into your checking account, these are the ways to do it:

  • A balance transfer can be transacted with a “convenience” check.  Convenience checks are those blank checks your credit card company sends you, from time to time, to induce you to run up debt. In this case the customer needs only to make the convenience check out in his own name and then deposit the check into his checking account.

One caution: call your credit card company and make sure that the convenience check that you are about to make out will apply against the balance transfer segment of your credit card account, or the segment with the lowest interest. (There are always three segments to every account: purchase, cash advance, and balance transfer, and it’s common for each to have a different interest rate.) 

  • If a convenience check is not available, the customer can request that a “direct” check for the desired amount be made out in his own name. The check will be mailed to him. He can then deposit that check into his checking account. Again, make sure the check is being drawn against the correct segment of your account.
  • If the customer has a bank-issued credit card account that is associated or linked to his checking account, as many bank-based credit cards are, one other scenario is possible.

Let’s say the customer has a checking account and credit card with XYZ Bank, and the accounts are linked. He maintains a zero balance on his XYZ card because the interest rate on that account is 18.9%.Let’s say that he has another credit card with the Super Duper Credit Card Company and he is sent a 0% promotional offer on balance transfers. (Cash advances are 24.9%.)

He can get money from that card into his checking account at the 0% balance transfer rate by doing this: He would call Super Duper and do an agent-assisted balance transfer from his Super Duper credit card account into his XYZ credit card account. Then, assuming he has on-line banking with XYZ Bank and can transfer funds around between his linked accounts, he would transfer the CREDIT on his XYZ card to his checking account.

So, if the amount he borrowed from Super Duper were $5,000.00, then he would have a $5,000.00 DEBT on his Super Duper credit card account and a $5,000.00 CREDIT on his XYZ credit card account. Again, that credit could be moved if his accounts at the bank were linked so he would move the $5,000.00 credit into his checking account and achieve the end result he wanted. 

The only thing he would have to get straight is this: the transfer payee number he would have to use for the transaction to go through would have to be his ZYZ credit card number, NOT his XYZ checking account number.

Because, no matter what anyone tells you, you cannot do an over-the-phone balance transfer in which you take out a loan against your credit card in order to transfer money from your credit card to your checking account.

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1 Colleen FArmer { 09.20.08 at 4:12 pm }

I had someone call who said they were from the bank tell me they were transferring my credit card to my checking and I asked how I would be able to tell the difference. I had paid the card off when I realized it had too high of interest rate. They said it came without an interest rate. Then I get a late notice for not paying it on time without even getting a statement and cannot tell the difference in my checking account as they said as my money was dwindling that I was spending it. I went in and also complained that my opening money was all put into savings and I had asked for a protection if I overdrew my savings thinking I had free service as I had at the last bank..Well they gave me $75 to open account and took $10 for overdraft protection because all my money was in the savings and none in checking so each transaction until I got my statement was charged an overdraft fee. I still cannot reconcile my account because of this move.. I called once and was told if I used the gold card it was my credit card and I had made two transactions which were just over 100$ and my minumum payment was the same amount. yet I got a late notice saying my payment was on 2965 which is what I paid off…so I only think that the bank is pulling afast one and someone is taking money from my account or that they have mixed a checking and credit card account together and I cannot tell which I am and I am not using the gold card at all……

2 Sam G { 09.20.08 at 9:08 pm }

Great tips here. Unfortunately, you’ll always have to have a local checking account for those times where you need to walk into a branch. You should also have a better checking account with all the perks. You can find some here


3 Clyo { 10.23.08 at 12:07 pm }

First off, I apologize for not responding sooner. I’m sure that whole incident caused you a lot of distress. I only hope it has been resolved.

In case it has not, this is the advice from “0016?: Close that entire account. Go back to the bank that gave you the deal you liked.

It sounds like the new bank gave you that $75 knowing that the account was set up so it would get the money back in service charges.

Also, you must call and confirm that the 2965 account is actually closed. Keep in mind that, even if you have asked that the account be closed, if the account is just “in closing” (an internal code) the bank/credit card company can go on applying charges to it.

For most companies – no matter what they say – the account will not close until the account is zero and has been zero for some interval.

They also have different time frames for the length of time the account must be “in closing” with a zero balance before it is actually closed. It’s very confusing for the credit card holder because you can get different answers from different reps when you call in.

That’s from “0016” –

From personal experience, this is my advice:

Talk to the bank’s branch manager directly. Sometimes managers have no idea that customers are receiving bad customer service. I’ve had managers waive fees that were assessed through no fault of my own.

If that gets you nowhere, look into whether your state has any kind of credit card advocacy program.

All fifty states are pretty much aware that consumers are getting the short end of the stick in dealing with credit card issuers. There may be help.

However, nothing gets the attention of front line representatives and managers in corporations more effectively than a letter from a U.S. Senator or Congressperson.

If this problem is not been resolved to your satisfaction, spell out what happened, include copies of your statements (black out the account numbers) and mail a letter of complaint to one or both of your U.S. Senators and/or your congressperson.

Be sure to cc the bank that created the fiasco.

If, for instance, you have spoken with the bank manager, cc that person. Be sure to list that person’s name as one of the parties being “cc’d” on the letter to your representatives. That is guaranteed to get his/herattention.

One of the three individuals in Congress is likely to be more responsive to helping constituents like yourself. If you know who that is, focus on that person.

One letter on congressional stationery demanding an explanation and/or fair resolution of this issue under threat of investigation can work miracles.

Good luck –

4 sandrar { 09.10.09 at 8:54 am }

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5 Plumbing claremont { 07.29.13 at 6:27 pm }

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