Why "hold" on credit limit, even after transfer is posted?

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dipr
 
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Why "hold" on credit limit, even after transfer is posted?

Postby dipr » Tue Jul 14, 2015 10:47 am

Situation:

I had a balance at a wells fargo credit line.
I transferred it to a bank of america credit card.

A couple of days later i see on my wells fargo page that they already posted receiving the payment from bank of america, BUT the available credit was not back up where it should be after wells received the payment and posted it.

I called wells fargo, they confirmed they had posted the payment, but said there was a "floating hold" for a couple of weeks, to "verify that the funds actually left bank of america" !!!

They said they might release this hold earlier if i fax some kind of proof that "the funds actually left from bank of america".

So i ask you, what kind of credit hold is this? what is the justification? especially when wells fargo itself already posted the payment they received to my account!! and then they act like they are not sure bank of america sent the funds..........


Kevin86475391
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Re: Why "hold" on credit limit, even after transfer is posted?

Postby Kevin86475391 » Tue Jul 14, 2015 10:17 pm

dipr wrote:Situation:
So i ask you, what kind of credit hold is this? what is the justification? especially when wells fargo itself already posted the payment they received to my account!! and then they act like they are not sure bank of america sent the funds..........


Unfortunately I'm afraid this type of thing is pretty standard in the banking and credit industry. Basically, I think just because one creditor shows the payment doesn't actually mean they've got the money from the paying institution yet. I think it's sort of...provisional for a bit.

I don't have a Wells Fargo account, but here are a couple of other examples to sort of illustrate the point:

My Citi credit card reflects payments to my balance INSTANTLY when I make them online (like within seconds), but of course doesn't reflect them in my available credit for a few business days after that. I'm sure if my Chase bank account said, "Hold on, he doesn't have the money in his account that he's trying to pay you." They'd revert my balance back to what it was before the payment, but it would take a few days.

Second example, I make frequent payments to all my credit cards, occasionally more often than once a week. Whenever I make more than one payment a week my Discover account pops up with a little message saying that the second payment won't be reflected in my available credit for a bit longer than usual...I presume that's because making payments more than once a week looks odd to the automated system so it sort of 'flags' it.

I believe there is some variability in the length of time a bank places a hold on different transactions. I know it has to do with the amount itself - naturally they want to be more cautious and thus process larger transactions more slowly - but I believe it also has to do with your particular account balance/history/general profile. On the spending end some merchants take quite a lot longer for the charge to be finalized than others.

Anyway, I'm afraid there isn't much you can do but wait. It really isn't unusual at all for a brief hold to be placed on credit limits pending a payment being completely finalized on both ends. On the bright side as long as the money is there in your B of A account there shouldn't be any problem.

Of course it might be a problem if you need the line of credit right away, but unfortunately I don't think there's much you can do at this point. Just one more reason to try to keep your utilization low I suppose. Anyway, best of luck, and of course definitely contact the banks again if it doesn't work itself out in a few business days, but in the meantime don't be alarmed.

whit
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Re: Why "hold" on credit limit, even after transfer is posted?

Postby whit » Thu Jul 16, 2015 12:33 pm

From what I understand, after talking my way through quite a few bank folks is that

Banks don't talk directly to one another concerning customers and they don't exchange money directly either.

So If you write a check from Bank of America, and send it into Wells Fargo, Wells Fargo may make a portion of it available or all of it, depending on their risk analyst and what they set up as policy (like, it would be available in 1 business day)

Even though at times it takes longer than that for the funds to be verified and available.

Which is how folks bounce checks, and such

It goes from, wells receiving the check, sending it into the fed bank, fed bank going to bofa to gather the funds and than giving it to wells.

Which is why sometimes you'll see a check already being cleared on bofa side but the funds is not yet with wells so wells hasn't made it available yet. It's in the black hole or with the fed bank on its way.

Wires and ach were created as a way to get around this.

Not sure if the way Bank of America sent the funds, was it electronic or through paper check.

But if it's paper than it's plausible that it's just a matter of wells covering their behind making sure the funds are good and not lose their kite to the wind.

But if it's electronic transfer..bad practice imho and not sure if it's worth it to you to question it with other authorities



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