Autopay Question

[kaneohe]

I have a credit card on autopay. I know from history that if the due date is on a wkend, the funds come out of my account the following Monday. The credit card rep told me that their system, however, inquires about whether funds are available to pay on the due date and if they aren't, the request is rejected and I am charged for failure to pay. Is this the way things really work.......their system talks to the payer system during the wkend and determines if funds are available at the moment? Or do they talk on the next business day......in this case after Labor Day Monday?

[donheff]

Quote:

Originally Posted by kaneohe I have a credit card on autopay. I know from history that if the due date is on a wkend, the funds come out of my account the following Monday. The credit card rep told me that their system, however, inquires about whether funds are available to pay on the due date and if they aren't, the request is rejected and I am charged for failure to pay. Is this the way things really work.......their system talks to the payer system during the wkend and determines if funds are available at the moment? Or do they talk on the next business day......in this case after Labor Day Monday?

You must be using a debit card. I would expect them to work that way. ATMs do, don't they?

[OldShooter]

I autopay almost all bills, but I do it from my Schwab bank checking account autopay feature, which is backed first by the cash in my taxable brokerage account and then by a $10K credit line. Everything is controlled from one one place and an overdraft is virtually impossible.

[bingybear]

What auto pay are you using? I found some work differently. I don't use the type that suck the money directly out of my bank account. I have my accounts sent the funds.

[jazz4cash]

It must vary according to the card issuer's policies. i did something similar with my Fido Elan Visa and they said it would be recorded as an on -time payment and I did not pay fees, interest or lose reward points. I prefer to push payments but in this case I can only pull the payments from checking account to Elan

[kaneohe]

Quote:

Originally Posted by jazz4cash It must vary according to the card issuer's policies. i did something similar with my Fido Elan Visa and they said it would be recorded as an on -time payment and I did not pay fees, interest or lose reward points. I prefer to push payments but in this case I can only pull the payments from checking account to Elan

OP here.......I have the same credit card. I assumed that it is pulled out of checking account since the autopay instructions went to the cc company.
What I'm wondering if the cc company can really interrogate the bank system and find out the balance on Sunday when payment is due......if the balance is low on Sunday but high on Tuesday after Labor Day when funds will flow, will
they reject payment and have a penalty?

[donheff]

Quote:

Originally Posted by OldShooter I autopay almost all bills, but I do it from my Schwab bank checking account autopay feature, which is backed first by the cash in my taxable brokerage account and then by a $10K credit line. Everything is controlled from one one place and an overdraft is virtually impossible.

Quote:

Originally Posted by kaneohe OP here.......I have the same credit card. I assumed that it is pulled out of checking account since the autopay instructions went to the cc company. What I'm wondering if the cc company can really interrogate the bank system and find out the balance on Sunday when payment is due......if the balance is low on Sunday but high on Tuesday after Labor Day when funds will flow, will they reject payment and have a penalty?

I didn't notice initially that you are paying a CC bill. I pay any bill I can on an auto CC charge to get the points. IIRC the CCs don't allow you to charge their bills to another CC so I pay all the CCs themselves with the bank autopay feature backed up by a line of credit like OldShooter. Since the bank autopay feature is a direct draw I assumed CC would get an immediate response from the bank as to whether it is covered or not, which is why I like the overdraft line of credit. As to whether the bank responds to the CC inquiry on weekends, you would have to check with the bank although the rejection would seem to answer your question.

[kaneohe]

Quote:

Originally Posted by donheff I didn't notice initially that you are paying a CC bill. I pay any bill I can on an auto CC charge to get the points. IIRC the CCs don't allow you to charge their bills to another CC so I pay all the CCs themselves with the bank autopay feature backed up by a line of credit like OldShooter. Since the bank autopay feature is a direct draw I assumed CC would get an immediate response from the bank as to whether it is covered or not, which is why I like the overdraft line of credit. As to whether the bank responds to the CC inquiry on weekends, you would have to check with the bank although the rejection would seem to answer your question.

just to clarify (sorry for any confusion)........I am asking about paying a CC bill (end of monthly statement period)from a bank account. I am not paying a CC
bill w/ another CC.

[sengsational]

I schedule mine 4 days early so I don't need to think about this. This behavior was precipitated from an event where "I was right" but spent way too much time clearing it up. Now all my scheduled payments are early.


I did get caught out a few years ago, though. Again, I was right, but lost the fight.


Payed HOA bill 4 days early via bill pay. There was a weekend and they sat on it a week day, so their system had it one day late. The HOA said I owed the late fee and wouldn't budge, so I asked the bill pay to cover the late fee. They refused on a technicality: I paid 4 days before the late fee was applied, but the bill was technically due 2 weeks before the date when the late fee date. So lesson learned: bill pay services are going to look at due date, which is sometimes quite different from the date when penalties/interest get assessed.

[Aerides]

It seems like you are planning to:

Initiate a payment to a credit card, online, on say, Saturday Sept5
Since that's a non-banking day, it would not be debited from your bank until Tuesday Sept8 (labor day)

So your credit card would credit you with the payment on 9/5 but not wd from your bank until 9/8. However, your CC has told you they do a pre-auth with your bank on 9/5 and will reject it if the funds aren't there, even though they aren't able to actually pull them until 9/8?

I think that's unlikely (the pre-check part), as it's not how ACH requests typically work, unless new chatter has been added to the transactions in recent years. But in some cases and banks these days they might well do that - especially if the CC and the bank are the same - like a VISA thru Chase and your bank is also Chase?

Besides, if they told you that, just play it safe and expect that to be true.

[Cobra9777]

We have 3 CCs all on auto-pay from our Fidelity brokerage CMA. IOW, the auto-pay is set-up at each of the CC companies to automatically "pull" the balance due from the CMA on the due date.

When I set this up several years ago, all 3 had slightly different language in the agreement regarding what happens if the due date is a bank holiday, weekend, etc. I was a little nervous about that. But when I called, they all told me the exact same thing... "Don't worry about it. If you set up auto-pay on our side, we will pull funds from your bank on the due date or the next available banking day and it will always be considered to have been paid on time."

It has worked like clockwork ever since with all 3. Never a problem and I never even check the dates. I do check cash balances frequently to make sure there's plenty to cover CC payments.

I also like that they reduce the auto payment by the amount of any credits to the account since the statement date. Back when I was using the CMA's bill-pay function to manually "push" CC payments, I would pay the full amount on the statement. Plus I was responsible for timing issues, holidays, etc. I like not having to think about that.

[Sunset]

Quote:

Originally Posted by kaneohe OP here.......I have the same credit card. I assumed that it is pulled out of checking account since the autopay instructions went to the cc company. What I'm wondering if the cc company can really interrogate the bank system and find out the balance on Sunday when payment is due......if the balance is low on Sunday but high on Tuesday after Labor Day when funds will flow, will they reject payment and have a penalty?

I'm just guessing at the reason, but think you are having a cashflow issue. I had that once and it was a pain.

I suggest right now pay the minimum on the CC, then when the auto pay screws up , at least they won't ding you a fee for failure to pay, and it will just be interest charges.

If it's not a cash flow issue, you can pay an auto-pay CC in advance, and the auto-pay part (I pay in full) will just pay what is needed.

[euro]

Quote:

Originally Posted by sengsational I schedule mine 4 days early so I don't need to think about this. This behavior was precipitated from an event where "I was right" but spent way too much time clearing it up. Now all my scheduled payments are early. I did get caught out a few years ago, though. Again, I was right, but lost the fight. Payed HOA bill 4 days early via bill pay. There was a weekend and they sat on it a week day, so their system had it one day late. The HOA said I owed the late fee and wouldn't budge, so I asked the bill pay to cover the late fee. They refused on a technicality: I paid 4 days before the late fee was applied, but the bill was technically due 2 weeks before the date when the late fee date. So lesson learned: bill pay services are going to look at due date, which is sometimes quite different from the date when penalties/interest get assessed.

I agree and I tend to schedule payments multiple days before the deadline. It's not like 5 days of float really amounts to anything these days. And the hassle of having to deal with one of these situations is considerable.

[W2R]

Like OldShooter, I autopay all my bills that I can possibly autopay. I have done this for decades. In my case this is via automatic deduction from my checking account.

I lead a fairly simple lifestyle, and I keep a high enough balance in my checking account that nothing I would ever need to deduct could possibly bounce. I look at my checking account online every few days and there has never been even one cent deducted that should not have been. On the other hand, I might be losing a few cents or a few dollars by not investing the money in my checking account, but this lowers my stress level and I choose to Blow That Dough by doing this.

[kaneohe]

Quote:

Originally Posted by Aerides It seems like you are planning to: Initiate a payment to a credit card, online, on say, Saturday Sept5 Since that's a non-banking day, it would not be debited from your bank until Tuesday Sept8 (labor day) So your credit card would credit you with the payment on 9/5 but not wd from your bank until 9/8. However, your CC has told you they do a pre-auth with your bank on 9/5 and will reject it if the funds aren't there, even though they aren't able to actually pull them until 9/8? I think that's unlikely (the pre-check part), as it's not how ACH requests typically work, unless new chatter has been added to the transactions in recent years. But in some cases and banks these days they might well do that - especially if the CC and the bank are the same - like a VISA thru Chase and your bank is also Chase? Besides, if they told you that, just play it safe and expect that to be true.

don't know what really happens.......the 1st answer was from a wkend cc rep;
the 2nd answer from a wkday cc rep......which for some reason I'm more inclined to believe. Wkday cc Rep said no checking is done on bank balance on due date (Sunday) but will be done on Tues (first banking day after due date) when funds will be removed.

........so I plan to have funds in bank on Tues.......bank person said they will consider the deposits first before the debits by some time at mid-day or later
(course that was a wkend bank rep tho). I forgot about the line of credit ......that should help minimize the harm if things go wrong except for the interest charged on any money borrowed.

[Sunset]

Quote:

Originally Posted by kaneohe .... ........so I plan to have funds in bank on Tues.......bank person said they will consider the deposits first before the debits by some time at mid-day or later (course that was a wkend bank rep tho). I forgot about the line of credit ......that should help minimize the harm if things go wrong except for the interest charged on any money borrowed.

When I had a cash flow issue, it was because the bank did things out of order, taking out the money before counting the deposits. So I no longer trust them to do the right thing.

I might not have been clear, but a person can pay a minimum payment on the CC, prior to the weekend, to avoid the extra fee for non-payment.

This would avoid the chance the bank may decide not to pay the CC at all if the account is a dollar short of the needed funds.

[badatmath]

That sort of question is among the reasons I don't use autopay.. . Would drive me bonkers to think about it. I pay everything when it comes in not when due anyway. Just works out easier in my head.

[Katsmeow]

Just a few autopay comments. Some say just to set the autopay earlier. However, not everyone allows that. I usually do set up an autopay for minimum credit card payment but like to set it well before the due date. But some insist on only doing to on the due date which I don't like in case there is an error.

Oh, I actually always prepay the full amount before the actual due day. I do the autopay only if something happens where I can't push the payment (I am in the hospital unexpectedly). I don't like to do the full amount in case there is some error like a huge charge that I didn't make and suddenly the full amount is paid. So what works is if the autopay is set early in the payment cycle, I let it be made and then manually push the payment for the rest. if the autopay has to be late then I just push the full payment. Minimum payment won't pay anything if the minimum has been made.

Personally if I had a bill due on the 5th that wouldn't be pulled until the 8th I would have enough to pay it in the account on the 5th. But I usually like to a few thousand dollars cushion in the checking account anyway.