No One at AmTrust Bank Seems to Know Jack About Their Minimum Balance Policy

This post has a long prologue, so I can catch you up on things since I effectively stopped posting last year.  It’s only a partial summary, but it helps to understand why I was asking about the Minimum Balance Policy in the first place.  For those of you uninterested, skip to “Here’s the meat of the story:”.

I’ve written before about how much I hate bank fees.  And I’ve written about how I use my bank accounts to manage my bills and save money.

A lot has happened since those posts were written, but you may be glad to know that I still use my bank accounts to manage my bills and save money, and I still hate bank fees.  And have had no trouble with both.

But, the economy has affected us all.  It’s been almost a year since pay cut #2.  We’ve moved since then, rented out the townhouse, and are looking for ways for me to make some money to help our bottom line.

August was a particularly tight month, and things are only going to get tighter.  We have a large property tax bill due in November, and there’s Christmas, too.   Plus, in order to keep our wonderful, reliable tenants we had to reduce the rent $100 a month.  Sigh.

As I was paying bills last month, I was very much afraid I’d have to take money out of our Money Market to meet our obligations.  But after collecting some past due fees from a couple of clients, and getting paid $75 to taste butter in a focus group, I was pretty sure I’d make it.  Just.  But I’d likely have to “borrow” a few hundred dollars from the Money Market account, just to be safe.

Except for Husband’s paychecks (which are direct-deposited into checking, I deposit all money into our Statement Savings account.  I don’t keep a great deal of money in there – it’s mostly used as a way station for money on it’s way  to the checking account, our Money Market (which is our long-term liquid savings), or to pay our mortgage).  I got in this habit years ago when I did keep more money in there so that I didn’t have to worry about check holds and could transfer cash into my checking account  after depositing my dark-ages paper paycheck (no direct deposit for them!).

Here’s the meat of the story:

That Statement Savings account now has a $250 minimum balance, which is pretty standard in the industry.  I’ve not given it much thought, but I’ve also been careful never to go below that threshold.  But when paying bills last week I forgot to transfer the “loan” of the extra few hundred dollars from the Money Market to the Statement Savings.  Luckily, I realized this on September 1st – the  day my mortgage is deducted from the account, and the day that my balance would have fallen below the $250 threshold.  And, luckily, it was around lunchtime, well before the end of the business day.  And to make it even more lucky, I realized it when I was on my way to the bank to deposit the rent checks into that account, so it wasn’t in the least inconvenient to handle it.

I was handing the deposit to the teller when I realized I had a few questions.  Would I get charged a service fee for going below the $250 threshold if I made a deposit before the close of that business day?  In other words, if the automatic debit hit my account at 1:15 pm and I made a deposit bringing me over the $250 requirement at 1:20 pm, would I get hit with the charge?  Or is it based on the balance at the end of the day?  I was told that I COULD get charged the fee.  There was no way to know, as it was automated.  Really?

And, what if I deposit checks?  Would the checks I deposited be counted as meeting the minimum balance requirement, even though they were as yet uncollected?  Does the bank give the client the benefit of the doubt in the limited scope of meeting the account’s minimum balance requirement?

If the check deposit I was making would suffice, I wouldn’t need to transfer cash from the Money Market.  But if I was required to keep an available balance of $250 – not simply a balance of $250, then the transfer would be necessary.

The teller, when asked, told me the balance had to be available.  That didn’t make sense to me, as it would seem that the bank would say what they mean and mean what they say, and I was pretty sure the word “available” was nowhere in this particular part of their fee disclosures.  I seemed to remember words that go something like “must maintain a minimum balance of $250…”, NOT “must maintain a minimum available balance of $250…”.

So, I asked very politely where it was written that we had to maintain the minimum available balance.  I wanted to know not only so I could know whether or not I needed to transfer money, but also because I thought it very important that THEY should know.

The teller called the manager, who tried to be helpful, and  recommended that I was “better safe than sorry.”  She offered to deposit one of my checks without a hold, effectively removing the necessity for me to transfer any money.

Very nice of her, and completely unnecessary, because the answer was much more important that my particular situation – which would have been easily taken care of regardless.  The offer of the one-time accommodation meant that the manager didn’t know the answer, either.  And I was never shown the disclosure, even though I’d asked twice.

Both the manager and  the teller seemed perplexed that I really, truly wanted an answer to these questions.  I was not angry, I was not belligerent.  I was quite pleasant as I explained that I felt it was important to get the answers, so I would know.  And they would know.

Seeing a long line, I assured them that they didn’t need to find out right that second.  I would welcome a phone call later, once they received an answer, most particularly to the question:  Is it minimum balance of $250, or minimum available balance of $250?

I did receive a call back from the teller near the end of the day.  She told me that it was available balance.  I asked, again, to see where that was written.  She hemmed and hawed for a few moments, and wound up telling me that she spoke to several people and they all indicated available balance, but they didn’t really know.  And, frankly, didn’t seem all that eager to find out.

How can they not know?!?!?!?    Someone must know!

So, now, I must find the answer.  I am off to the Consumerist, and  to try to find some bigwig AmTrust email addresses.

And I’m asking you, my dear, neglected friends.  Do let me know if you know, if you know someone who knows, and/or if you agree with me that it’s important to know.

AmTrust Canceling my HELOC. Goodbye, safety net!

A few months ago I wrote a post about AmTrust Bank trying to bribe me to close my Home Equity Line of  Credit (HELOC).  They only offered $50, and I passed.

But I worried that they’d cancel the HELOC anyway, and I was right to worry.

Yesterday I got a call from Mary at AmTrust, telling me that they would indeed be canceling the HELOC.  She again offered me the $50, as I “may as well take the money since you’re going to lose it anyway, ” because AmTrust is “getting out of the HELOC business.”    I was unhappy to hear this news, and told her I’d call her back.

I discussed it with Husband, and  even he really doesn’t see why I’m unhappy about losing the line of credit.  It’s not that we need the money.  My balance is zero, and has been since about 6 months after I opened it (I took it out to pay off my car loan so I could deduct the interest, then paid it off quickly anyway).

And we have a healthy savings.  Very healthy.  And a few other investments that could easily be turned back into cash with little lag time in the event of an emergency.  And we pay $25 a year for the privilege of not using it.

But I like knowing it’s there. I like it an awful lot.  It’s a $10,000 safety net.  Just in case.

So, instead of just being a proverbial  sheep, I  called Mary back today and asked for documentation that they had a right to do this.  After all, it was my understanding that this was a 15 year mortgage, which would give me 7 more years.  I want to see, in writing, the situations in which they are able to pull the plug.

I also want to know what happens if I take the money, and perhaps put it into another investment which would give greater returns than the interest I pay.  Would they call the loan?  Would they let me keep it until it’s paid off?

I must be the only person who has balked at all, because Mary was surprised by my request.  She then told me that if I’d like,  the bank next store would be happy to take my application for a new HELOC.

Not the  point, Mary.  I already have a HELOC.  And I’d like to keep it, thankyouverymuch.  I certainly don’t want to apply for any new credit, and I don’t want to pay any additional fees.

Mary didn’t know the answers, but promised to get them for me.

But, honestly, chances are slim to none that I’ll get to keep it.  So I’ll likely take the $50 buyoff.

And I’ll try to look on the bright side.

I’ll be saving $175 in yearly fees.  Add that to the $5o buyoff  and that’s a very real $225 more in my pocket.  So, if I do have an emergency, lets pray it’s an easily doable $225 hummingbird variety and not a $10,000 poop-my-pants Bigfoot.

Free Money for Reading!!!

TD Bank wants to help you encourage your kids to read.  Kids can earn up to $10 for reading 10 books as part of their Summer Reading Program.  Just download their form and have your kids list books as they read them.

The $10 credit will be deposited in a new, or existing, Young Savers Account when they take the completed form (with the list of 10 books read) to a TD Bank branch.

That’s what I call a win-win!

AmTrust says, “We love you! Really! But will you please cancel your HELOC? We’ll give you fifty dolla!”

I just got a really weird phone call.  But first a little background…

AmTrust Bank is one of the banks with which we do business.  It’s the bank where I purchased my mortgage, and a week later took out a $10,000 Home Equity Line of Credit to pay off my car loan.   The HELOC is actually a second mortgage of sorts.  I don’t recall right now if it was a ten or fifteen year agreement, but I do recall that they gave me a $100 Home Depot gift card for opening it, and they charge me a $25 fee to keep it, with no penalty if I close it as long as I keep it open for at least three years.

I took out the HELOC so I could deduct the interest, and made the car payment to my HELOC instead of a bank until I paid it off six  months later.  I’ve not used it since, but that $10,000 is available if I need it.

I may not use that credit line, but I like knowing it’s there if I need it.  Despite having a five-figure emergency fund, one never knows when one will have a really big emergency, does one?  That’s why we decided it was worth $2 a month to keep it open.

Since the most recent financial crisis began I’ve been reading and hearing stories about some of the things banks are doing to reduce their exposure to debt – good and bad.  Credit card interest rates are being hiked while credit limits are being slashed.  HELOCs are being canceled and/or closed, whether people are carrying a balance or not.

I’d hear things like that and wonder if any of the companies with which I do business would take these actions.  I’ve not really worried about it since we pay our balances off every month, and we don’t need the credit to survive.  We have excellent credit, so I understand that if a company makes one of these decisions that affects me that it isn’t about me at all – it’s about them.  I have my financial house in order – they’re scurrying to do the same.

So today I get a phone call from said bank, asking me if I’d yet received the letter about my HELOC.  No, I had not.  But already I’m thinking that they’re closing it, and calling to lessen the blow.  I’m already composing my reply in my head when what she is staying starts filtering through.  I heard a few phrases – “we’ll pay you $50” and “if you want to” and “no penalty” and “just stop by to fill out the paperwork“.

Whoa.  “Let me get this  straight,” I say.  “AmTrust is willing to pay me $50 if I close my HELOC?”

Yes, and there’s no penalty.”   Well, there’d be no penalty anyway, chica.  But I held my tongue.

“But I don’t have to if  I don’t wanna?”

No.  You may keep it open if you wish.

Uh huh.

I end the conversation and hang up, thinking that AmTrust really, really, really wants to close the HELOCs but really, really, really doesn’t want to piss off their customers.

Huh.

Well, I’d like to keep my HELOC.  But I have to figure out AmTrust’s next move.  What will they do if not enough people voluntarily surrender their  HELOCs?  Are cancellations next?

Am I better off taking the $50 now, or waiting, hopeing they don’t cancel it?  Waiting and getting nothing.

I’m feeling the love!

4/9/09 9:52 pm Edited to add:

I just ran across this article which describes a classs action lawsuit against AmTrust accusing them of illegally suspending these types of accounts.  No wonder they are looking for a kinder, gentler way of getting rid of that risk!

A Disturbing Trend In Credit Card Rate Determination

The Federal Trade Commission currently has a lawsuit filed against credit card issuer CompuCredit (CCRT). It’s not about them raising rates because you forgot to make a payment, or because you went over your credit limit.

ComputCredit has been using lifestyle, in part, to determine rates. If you shop at certain types of establishments – a massage parlor, retreading a tire, or visiting a marriage counselor – they raise your rates.

But that’s not even why the FTC filed suit. They filed the suit because CompuCredit didn’t tell you about it ahead of time.

Of course that part is disturbing, but to me the more disturbing part is that my behavior – not just my payment history – can affect the rate I pay for credit. I can conceivably be charged a higher rate based on criteria I don’t even know exists, so there’s nothing I can do to improve it.

I guess I’m making some “credit-friendly” choices, since my score is in the top 1% in the nation. At least it is now. But if this type of behavior-leads-to-risk analysis gets more specific, more in-depth, I could conceivably see my score and my rates plummet despite my excellent payment history.

A disturbing trend indeed.

Saving by Delusion

I’m not one of those people that can set my clocks ten minutes ahead and fool myself into thinking it’s later than it is. I just open one bleary eye, think to myself, “It’s not really six o’clock yet!” and go back to sleep. Too smart for my own darn good. Given that, it’s peculiar that my savings strategy is basically to delude myself. I pretend I don’t have it. And it works, for me at least.

Let me backtrack a bit.

I still remember opening my very first bank account. I was seven years old, and my Mom took my sister and I to the bank to open our own savings accounts. We’d cleaned out our piggy banks, and the very patient bank representative counted out every nickel, dime and penny with a smile. I was very proud to hold my passbook, and I looked forward to every trip to the bank, every deposit I made. The first time interest was applied I clapped my hands with glee. A saver was born.

That account was nice and flush after my Bat Mitzvah. That’s when the Saving by Delusion plan first came to me. I decided to pretend I didn’t have it, as that money would be used for college anyway. I was well into my Saving by Delusion plan when I was stymied by the only real flaw in it: others did not pretend I didn’t have it. We had to raid it to buy my Mom a car when I was fourteen, another fun episode in the My Mom Is Notoriously Bad With Money saga. Easy come, not so easy go. Lesson learned.

Today I actually use a money market account as my long term “savings” account. That gets the highest interest rate, but the fee-less withdrawals are limited. Money going into that account is there for the long haul. It’s where we keep our emergency fund, our new-to-us car fund, and any other long-term goal money. I pretend I don’t have it, unless I’m making a deposit.

For shorter-term savings I use a regular statement savings account. Since my checking account earns no interest I need somewhere to park money temporarily, yet still earn a little interest. Because I’m not limited in the number of withdrawals I can make I can transfer money into and out of this account at will.

All money that does not come from Husband’s paycheck gets deposited into short-term savings. Any survey money, Craigslist/Ebay money, Health Savings Account reimbursements, gift money – any extra money at all – goes here.

At the end of the month any money that’s left over in checking or statement savings goes into the long-term savings account I pretend I don’t have.

I rarely look at the balance of the money market account because I don’t want that figure in my head. Husband is on board with the Saving by Delusion plan, but every once in awhile there will be a conversation that goes like this one, which we had last year:

Husband: I want a new computer. My current one is too old and I can’t update it anymore. I’ll be able to get more freelance work done faster if I have a new one.

Me: Okay, I agree. You’ve really waited a long time. How much is it?

Husband: About $4000.

Me: Whoa!

Husband: We could take it out of savings…

Me: We don’t have savings, remember (wink). How will we pay for it?

Husband (throws up hands): I’ll do freelance work, and you can save it up until we have enough to buy it.

Me: That’s a great plan, honey. I’ll even put my Craigslist money towards it.

He got his new computer for Christmas, even though he’d only earned about half of the cost. This week we deposited the check that will have him repay our savings.

The delusion is intact.

We’re In Debt is holding a group writing project this week to encourage saving. If you have a savings idea or strategy, please share it!

Adding Idiot to Injury

You suddenly find that there’s more money in your bank account than there should be. What do you do?

What if it’s an extra $5 million? Dollars, not pennies (though I’d certainly be happy with 5 million pennies, too!).

You’re a basically moral person. You call the bank and tell them about the error. They tell you there is no error; the money is yours.

Do you say, “Okay!” and hang up as quickly as possible? Decide you’ve done your moral duty and reported it? Realize that the bank must be right, it is yours by golly!? Do you go spend the windfall?

Of course not. You’re not an idiot. You realize that the only idiot in this scenario is the one you’ve been talking to at the bank who thinks you would forget that you’ve got $5 million coming to you.

You would go down to the bank and talk to as many people as possible until you find one who is not an idiot and can get it straightened out. You might even ask to keep the interest (about $400 a day at 3%), or at least score a toaster. Can’t hurt to ask, right?

You would not, under any circumstances, withdraw $2 million. You would not spend it on gifts and bad investments.

That’s good. Because then you would not get arrested and charged with grand larceny, like this idiot.

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