Don't Charge Where You Save
Not so much a frugal tip as a warning: if you're in a situation where you have a large credit card balance, and you are having to juggle payments to make ends meet, then don't keep your bank account at the same institution where you have your credit cards. The Big Picture brings this story from Mr. Mortgage, about a friend's rude awakening:
Yesterday morning she logged into her Wells Fargo checking and savings accounts to pay bills online and there was a ZERO balance across her accounts. However, her debt was paid down considerably. Immediately she called Wells and they informed her that because she was over 30-days late paying her Wells credit that they drained the accounts in order to pay down the bills.
I think this is borderline fraudulent on the bank's part -- I'm sure a clause permitting this was included in one of the revised credit card agreements that banks like to send out on a "take it or leave" basis; but I think a separate contract governs her checking/savings accounts, and one contract should not have the power to alter the other without an explicit acceptance.
But, arguing contracts with a bank is a mug's game. What you can do, if you're not in a position to pay down those cards, is to immediately move your savings and checking accounts to a bank where you have no credit cards. And then make sure you never accept credit cards from that bank. (And stay alert -- your two banks might merge someday.) Brad - Saturday 14 February 2009