Yesterday, a reader told me he was shut down by Capital One. They told him his checking account was shut down and was asking if he should close down his credit cards preemptively. Since this happened to me recently, I told him that canceling them won’t do anything because it’s already in the process of getting shut down. Even though I preemptively cancelled mine, I still got a letter a week later saying that they will be closed them down. However, I was able to proactively cancel my Kohl’s and still hanging onto hope that I’ll get it back.
Checking or credit card did him in?
Almost all of the shut down stories that I’ve heard about have been shut down due to the checking account, but my suspicion is that it’s the credit card activity that is prompting the shut down, but they choose to close the checking account first (let me know otherwise.) The reason for that is because this reader wasn’t really abusing his checking account. The reader thinks he was shut down to all his ACH ins he was doing. He was also using them for his main bank, so it’ll be a bit of a pain for him to redirect his payroll and automatic payments. He created a chart on his ACH ins. Seems like he had been doing it for a while and so the system should have been “trained” in his usage pattern. It seems he was doing about 20K per month give or take.
Credit card side
I asked him about his credit card side. He was cycling his CL about 4x from January to May but hasn’t had activity since. Doesn’t mean they didn’t get him for past activity though. Some minor debit payments too.
I mean, what’s there to say? We all know the risks of MS’ing on the credit cards. I’m honestly not sure if it was the ACH ins that got him or the cc activity. It’s almost a chicken and egg story. The only true lesson learned here is – he shouldn’t have been using Capital One as his primary bank. The process of changing your payroll and all those automatic payments suck! And you may miss a random department store bank card and get hit with an NSF if you don’t go through ALL OF THEM.