Morgan Ward2 said:Hey everyone!
So, I’ve got this student package set up over at JPMorgan Chase—it covers my checking account, savings, online banking, and that Amex Start card they give to students. Plus, my checking account comes with an overdraft limit of $333.
Here’s the thing though... what actually happens if my Amex bill hits and I don't have enough cash in my account to cover it? Like, say I’m already sitting in the red by $233, and then the Amex bill shows up for $133. Does the bank just automatically push me into a massive unauthorized overdraft—and what does that even mean for my life? Or does the unpaid part (basically $33) just roll over to the next month? Also, am I gonna get bombarded with notices or late fees or whatever?
Thanks in advance 🙂
It will just pull from your authorized overdraft up to the limit (down to -$333), meaning they'll collect $300. Payments from a Student American Express will NEVER push you into an unauthorized overdraft. They only charge you up to the maximum allowed overdraft amount. If you have $233 left in your overdraft limit and your bill is $500, the Amex will take the remaining $233 of your available credit, and they will attempt to collect the difference of $267 again in about 8 days, followed by formal notices. The second collection attempt usually happens around the 15th or 16th of the month, giving you a window to get funds into your account so the Amex can be paid in full. If you fail, obviously they send notices; they can sue you and cancel your cards if your accounts end up being delinquent (whether partially or fully).
Plenty of friends at college went through this, and when I tell you they send notices, I mean they are PERSISTENT about collecting—I swear, it feels like those notices arrive every three days. I honestly don't know how they afford to spend so much money printing notices for a Student American Express. And don't even get me started on the constant badgering. When they first offer you the card, they treat you like a broke student who could use a little help here and there; but once you fall into debt, they start treating you like a high-earning professional and a public enemy.
Just return that Amex to the bank and if you need to pay things off in installments, use a Visa card instead. You don't want to spend your college years buried in debt or flagged in their system as a bad payer, only to have them deny you a loan later when you actually have a good salary and a career.
The Student American Express is one of the worst products Bank of America offers, designed to push credit products onto people who aren't creditworthy—most of whom are barely making ends meet. They make their money off the interest because everyone is constantly short on cash, so they slap you with interest rates and essentially throw you under the bus. If they cancel your student card for stuff like this, I'm pretty sure you lose eligibility for the student version entirely.
Use your head—use that Amex as minimally as possible unless you have steady income from a part-time job. Pay your bills punctually, ideally covering most of it during the first billing cycle (around the 9th), and ensure you have enough to cover any small remaining balance before the next cycle (the 16th-18th).
