A Situation involving a Bank and Credit History. What would you do?

[Mike 03]

This involves an account I have had since 1985 or so, which my dad cosigned for at a well known bank, and it used to be important, and my only bank account, but over time it has become a ridiculous account where the fees are much greater than the benefits of having any such account. In other words, the purpose for which I would use it are demolished by the idiocy of the fees that actually make the account a punishment rather than a benefit.

Due to the "fees" I owe money on an account I never violated or withdrew more than I had in the account.

My instinct is to pay off the fee amount I owe, even though it is not a result of recklessness on my part, and close the account for good.

But I worry that this could harm my credit record.

Can fees you accrue not through spending but just by ignoring fees to some account you never pay attention to destroy your credit record?

[madeline_con]

1. I would go with pay the fees and close it.

Get a written statement from the bank to that effect when you do it, so there is no problem with erroneous credit reports.

[The River]

2. Pay It Off

and then get a Credit Union account.
Most are no-fee and pay interest on savings and checking.
They also offer lower interest C cards.

[obliviously]

3. Credit is a myth anymore.

I would not worry about it. The banks are rethinking what good credit actually is now.

[murphymom]

4. It's been years since I worked for a bank

but the one thing you would want to avoid is having the bank close the account for non-sufficient funds, which could happen if the fees caused the account to be overdrawn and you don't pay off the charges. That I believe would show up on a credit record.

If you've had the account for quite a while, check the kind of account plans the bank currently offers. They may offer another product that would be a better fit for you and wouldn't charge so much in fees. Had that happen to me recently on a small account I keep for particular expenses. The teller brought it to my attention and by switching to a different type of account I eliminated all the service charges.

[HillbillyBob]

5. Fees will continue to accrue.

My partner says it can hurt your credit, but at some point it becomes not worth while to keep paying to keep an account just for the credit benefits.
just my opinion. I have an account with Wamu that I have not been using. It was a 'free' account and has less than 10$ in it, in order to do anything I have to go online and they charge me $5 for every log on, and there is no branch within 300 miles of where I now live. I called them they said send a note to the home office stating the account number and a request to close it.
I don't think it could hurt your credit too much, it is not a credit account like a credit card.

[madrchsod]

6. pay off the account-it will not effect your credit score

credit scores are weighted to on time debt payments and how much debt you are carrying. closing an account would knock just a few points off for a short time. right now low debt load and on time payments are solid gold...

[NJCher]

7. pay and sue in small claims

Pay it and then Google Small claims and whatever your state is. Example: small claims court NJ. They will probably have the forms for small claims online. Here in Jersey it only costs about 22 to file in small claims.

You'll have to make some sort of case for yourself (shouldn't be difficult, based on what you say above). You only have to write about a paragraph or so.

What will happen is that after you file, their attorney will call you and work out some type of settlement with you.

You get whatever you file for, your court filing costs, and whatever you spent on postage (I always mail certified, which costs 5.90).

In the last two months I've sued my local utility, my phone company, and a tenant in small claims and have had all cases settled to my satisfaction out of court.


Cher

[Statistical]

8. Is it even on your credit reports?

If not then it has no effect one way or the other.

If you don't know get your CR for free http://www.annualcreditreport.com

If it is a small amount would pay it. Periodically banks clear out the books. They take all the "deadbeat" accounts and they sell them to a colleciton agency.

It does two things
1) they get $0.05 to $0.10 on the $
2) they can write off the uncollected debt.

Once collection agency gets it you can expect it to
1) popup on all 3 credit reports and stay there for 7 years
2) they add their own fees, punative interest 29.9%, no payment fee each month and pretty soon a
$100 charge is $430 which they will "Settle" for one time payment of $300.

[PhiBetaCretin1]

9. YES! This happened to me too - BAD OUTCOME

> "Can fees you accrue not through spending but just by ignoring fees to some account you never pay attention to destroy your credit record?"

YES! The same thing happened to me and I stupidly did NOT pay up, thinking it so ridiculous that I should be hit with fees and "overdue" fees and such - for something I didn't do recklessly. :grr:

> "Due to the "fees" I owe money on an account I never violated or withdrew more than I had in the account." -- Exactly the same thing in my case. I had money that was just sitting in an account. Their monthly service fee ended up eating it all up, and then some. That "then some" - instead of causing the account to close, was recorded as am overcharge. :wtf:

YES, it did show up on my credit report and I have suffered from it. Just criminally abusive on the bank's part (Wachovia).

PAY IT before it wreaks havoc - and take it up with the bank later, in some other way.

**** Is your "well known bank" by any chance Wachovia? *** :nuke: