Paying loan with automatic draft-WWDRD

[pinkytuscadero]

I am watching Dave Ramsey. He mentioned not allowing creditors to have access to your bank account.

I have a loan that is auto drafted. I thought it was a good idea so I would never have a late payment. It is an installment loan.

I have looked at the website and can't find it. I've googled but it pertains to credit collectors.

What Would Dave Ramsey Do?

[Checkers Boy]

I am watching Dave Ramsey. He mentioned not allowing creditors to have access to your bank account.

I have a loan that is auto drafted. I thought it was a good idea so I would never have a late payment. It is an installment loan.

I have looked at the website and can't find it. I've googled but it pertains to credit collectors.

What Would Dave Ramsey Do?

I think his advice is to people who are constantly on the edge of being overdrawn. People call his show and don't have the money for the payment, but will have it, and the creditor wants to set up an auto draft for the day the money is to hit the account. Needless to say, you can imagine the worst outcomes of this situation. Then, they may do it again, as unscrupulous lenders have done in the past. Now, you owe the BANK money AND the creditor money. And overdraft fees, etc.

Dave Ramsey has some great ideas. And if I had a million dollars, I'd be okay... but almost getting stuck in Orlando for 2 days because I didn't have a credit card, and the banks were closed, and rental car companies don't take cash... well, that SUCKED!!! I cursed Dave Ramsey and wrote him when we got back.

JFYI, Thrifty Rental Car WILL take a debit card for transactions, and I use them whenever possible.

[mac]

I think Ramsey would say don't let anyone have access to your bank accounts. I had a BAD experience with DirecTV getting a little carried away when I gave them permission to take my monthly fee automatically. Long story, but take my word for it, it cost me hundreds and I had to fight them for over a year just to get a portion of my money back. After that, I will never let ANYTHING be automatically drafted. BUT if you've had good experiences with it, have the money in the account and (MOST IMPORTANTLY) are KEEPING AN EYE ON EVERY MOVE THE COMPANY MAKES, I wouldn't change it just cause Ramsey said so.

[pinkytuscadero]

So if I get paid on the last day of the month, I can get it drafted on the 1st, but watch the payments?

Pinky

[Kitty]

Pinky, we have our vehicle payments set up for automatic draft with NMAC (Nissan) because they charge a fee to make the payment online and I just got tired of writing checks every month.

The payments come out ON the due dates, and we receive a statement every month for each vehicle reminding us of the draft.

We have not had any problems with these drafts.

I have heard Dave Ramsey talk about not giving creditors access to bank accounts. I think the main concern Dave has with this (and it's a valid one) is if some unscrupulous creditor has access to your bank account, and you get behind, they could decide to drain your account to satisfy the debt to them.

Many times when people ARE behind on payments, creditors will ask for bank account information in order to get the payment posted as quickly as possible. These are the tactics that Dave Ramsey says to watch out for.

I think it's okay to use the automatic draft system for certain things, but in all cases it pays to really watch your bank account to insure there are no questionable transactions.

[Kitty]

So if I get paid on the last day of the month, I can get it drafted on the 1st, but watch the payments?

Pinky

Yes, as long as your bank has the funds available on the 1st.

[Ted]

I use automatic draft for limited things - Mississippi Power, Willmut Gas and Bell South/ATT.
With these three I always get a statement about two weeks before the transaction date and I've never had any problem.
These things seem to show up when I'm out of town so it's a very handy arrangement for me.

[mac]

I think the key is to just pay attention-- close attention-- and jump on any problems immediately, and don't take any crap off anyone who's got access to your account. If they make a mistake, make them fix it THEN. Don't believe anyone who tells you something will take 30 days. They'll string you along for an eternity, 30 days at a time. They're just hoping you'll forget or get too busy with something else to follow up again in 30 days.

In my case, DirecTV continued debiting a checking account "by mistake" for about 6 months after I cancelled the service. I had gotten married and moved and was no longer using that checking account, but it was still open. Well, it eventually overdrafted the account, of course, and the bank started putting it on my overdraft protection, which was basically a credit card. I didn't look at the statements from the bank because I wasn't using the account. So I didn't find out they were still drafting the account until after I finally went to close that checking account!

By the time I caught it, they had taken hundreds of dollars that I didn't owe them. It took me a year and a bunch of angry phone calls (one every 30 days) to get them to send me a check for the money they had drafted, but I still had to pay a ton of interest because it was charged to a line of credit.

So just stay on top of it and beware that if a mistake is made, it's probably gonna cost you a lot of gray hairs to get it fixed.

[Kitty]

Another option to automatic drafts is to utilize the online bill payment option available through your bank.

While online bill payment still involves timing (making sure you've created the payment in time for it to be sent by the bank to the creditor before the due date), it saves postage and a trip to the post office.

I'm a big fan of online bill payment. Anything that keeps me from writing checks!

[TheKing]

i never let anything auto draft... i want the ability to NOT pay someone if they piss me off

[Rainey]

i never let anything auto draft... i want the ability to NOT pay someone if they piss me off

So not pay for the service?

[Checkers Boy]

So not pay for the service?

They pissed him off...

Jeez...

[Hermione]

Another option to automatic drafts is to utilize the online bill payment option available through your bank.

While online bill payment still involves timing (making sure you've created the payment in time for it to be sent by the bank to the creditor before the due date), it saves postage and a trip to the post office.

I'm a big fan of online bill payment. Anything that keeps me from writing checks!

That's what I do too. The only thing that autodrafts is my car insurance. I let the phone bill come directly out of my account, but I authorize it every month.

[itsmyopinion]

i love good ol' dave!

[Rainey]

They pissed him off...

Jeez...

Yeah I know. That would be an interesting philosphy to live by... lol