If you have credit cards or other consumer loans at the same bank that you also have your checking and savings accounts, 
then I suggest that you take note that many banks and credit unions are now freezing or restricting customer’s cash accounts (checking and savings) when they miss payments or fall behind on credit cards and loans at that same bank.
This policy is creating situations where bank customers are unable to make purchases or do online banking even when they have substantial balances in their cash accounts. In some cases, they can’t even make payments between accounts within their own bank, unless they go to a bank branch to handle the transactions.
If you are in that type of situation with your bank, I strongly suggest that you either move your cash accounts to another bank as soon as you can – or payoff and close all credit cards and other loans with your bank.
In many cases, accounts are being frozen without any warning to the customer. You will only realize that there is a problem when you are making a purchase with your ATM card and it is rejected for no clear reason. Another clue that something is wrong will come when you find that you are locked out of your bank’s online system.
A freeze can also be extended to cash accounts of other family members where you might have power of attorney or emergency authorization rights – as might be the case if you are managing the finances of an elderly parent or a disabled family member. Suddenly they can’t access their account either only because your name is connected to it in some way.
In spite of all the taxpayer money the U.S. has invested toward saving and strengthening the banking system, these financial giants continue to abuse and take unfair advantage of their customers. They seem to enjoy kicking their customers when they are down. Bankers see their unconscionable actions as simply “business decisions.”
In the past, cash accounts held by a bank could only be frozen or seized by court order or by government action. Now the banks are doing it without any authority other than that they feel they can, and they will when they feel they might be facing some financial risk. They will point to some small type in one of their past account change disclosures as giving them the authority to abuse you.
Having your accounts frozen can quickly create a financial meltdown. Inability to access your accounts will usually result in late payments to all of your other creditors, almost instantly destroying your credit rating. This becomes even more complicated if you already have direct deposits and automatic payments moving through your cash accounts – as most of us do now.
One blogger reported that because of a bank error that credited two of his credit card payments to another family member’s account, his account was frozen for nearly three weeks before he could get the problem identified and resolved.
“No matter how hard I pleaded with them to let me access my account so that I could make those payments, the bank’s so-called customer service department refused to budge. I had the money to make the payments, but I simply could not get to it. They would only give me access to my cash accounts if I paid off those accounts completely and closed them – a financial impossibility for me at the time – although it was their error that created this mess. In less than six weeks my credit score fell from the mid-700s to the mid-500s. Because of this, two other unrelated credit cards that I held at the time eventually raised my interest rates a full 15%, even though they were always paid on time. I finally relented and found a way to pay off the credit cards so that I could access my checking account and get everything caught up. As soon as I did, the bank closed all of my accounts anyway.”
I know this to be a fact. I have been recently victimized by this very same bank policy. I managed to work around this unpleasant situation, but only after suffering several days of near panic.
“Caveat emptor…”
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When you applied for a credit card – you were asking the bank for an unsecured loan. On the application, it clearly states that if you fail to keep your agreement to make timely payments, they will have certain recourse. i.e. attach ANY accounts that you have.
Your article appears to focus on how to avoid keeping your part of the agreement.
If in fact you had the funds available – it would appear to the bank that you were CHOOSING to ignore your part of the agreement. And it is only logical that they should begin collection procedures.
Hal, a very good observation! There are always “two” sides to every story.
@hal osterbaan – Hal, you have a valid observation and I agree that at some point the bank does have a right to say “you have $2000 in your checking account and you’re three months past due on your Visa, so we are going to freeze your funds until you bring your Visa current.” I have no problem with that.
Please read my follow up post that responds to your objection in more detail.