I'm currently making my car loan payments through Chase - they are processed via auto-pay, and I check the remaining balance on the Chase app every month when the payment goes through. That made me wonder: for those who have driven long enough ago to remember such a time, how were car payments made in the days before banking apps - or the Internet more broadly - became commonplace?
Having previously asked this question on Quora, a Q&A website, I remember that some of the respondents on that site mentioned coupon books that the bank (or whatever the lending entity was) would give the driver upon receiving the car, and the driver would then mail in a coupon every month along with the check for that month's payment, until the loan was paid off. What was your experience like? Anything similar to what I described?
The same as every other bill. They mailed the bill to you and you mailed a check back.
I even sent car loan checks monthly during the internet era. A lot of banks had a processing fee for making payments online with a debit or credit card. Usually, I would pick a day out of every month and just bail out my bills all at once.
Usually I walked in to the Credit Union Branch and paid in person. I loved that concept as you received a receipt and were videotaped on their camera. So if a clerical error took place and they tried to claim you didn’t make the payment, your receipt (and if needed ) also the camera showed the exchange of money as well.
Plus instant credit for payment as it usually got posted before 2 PM or if you paid after 2, the following business day at 2 PM.
Quote from: JayhawkCO on September 05, 2023, 12:50:49 PM
The same as every other bill. They mailed the bill to you and you mailed a check back.
Or, in my case, mailed out coupon books and envelopes that upon occasion did not fit right. I sent the payment in with the monthly coupon every month.
My mom always had her car loans through a bank she had an account at, so she would just go into the bank and tell the teller she wanted to pay such and such amount on the loan from whichever account. (She also, to this day, pays the electric bill by going to the electric company headquarters and handing them a check in person so she doesn't have to use a stamp.)
Quote from: akotchi on September 05, 2023, 01:06:11 PM
Quote from: JayhawkCO on September 05, 2023, 12:50:49 PM
The same as every other bill. They mailed the bill to you and you mailed a check back.
Or, in my case, mailed out coupon books and envelopes that upon occasion did not fit right. I sent the payment in with the monthly coupon every month.
Mortgages had the coupon book as well. Although as I recall, I had to supply my own envelope.
Quote from: GaryV on September 05, 2023, 02:00:41 PM
Quote from: akotchi on September 05, 2023, 01:06:11 PM
Quote from: JayhawkCO on September 05, 2023, 12:50:49 PM
The same as every other bill. They mailed the bill to you and you mailed a check back.
Or, in my case, mailed out coupon books and envelopes that upon occasion did not fit right. I sent the payment in with the monthly coupon every month.
Mortgages had the coupon book as well. Although as I recall, I had to supply my own envelope.
I've never had a coupon book for a mortgage. It's always been a paper statement with a perforated stub; if you want to mail a check, you tear off the stub, fill in the amount paid, and send that with your check.
Our HOA sends a payment book every year with twelve payment coupons. I never use them because I pay electronically through the bank's bill pay system, but I do double-check the account number, payment address, etc., every December when the coupon book comes.
Edited to add: My mother only started using electronic bill payment earlier this year after having problems with mailed checks being stolen. I convinced her it was safer, faster, and more reliable to pay electronically. There are plenty of people out there who don't "trust" electronic payments or who won't use them for various reasons.
Ditto on the coupon books. I'm not a fan of automatically-deducted payments. If something comes up that you need the money for, you aren't having to deal with the possibility of having it go elsewhere because you had an automatically-scheduled payment.
I had a coupon book. I sent in the payment with it but never got confirmation of the payment.
Quote from: hbelkins on September 05, 2023, 04:24:54 PM
Ditto on the coupon books. I'm not a fan of automatically-deducted payments. If something comes up that you need the money for, you aren't having to deal with the possibility of having it go elsewhere because you had an automatically-scheduled payment.
I don't like giving anyone else (other than Ms1995hoo) access to my bank accounts for any reason. I don't like making it any easier than it has to be for some miscreant to alter the payment amount I set up, pull an extra payment, etc.
Coupon books; monthly invoices, I've had both depending on the bank or loan company.
I've also called in and made the payment over the phone.
For the one car loan I've had, a coupon book came in the mail a week or so after I signed the paperwork.
My wife's student loans also had a coupon book.
Having online access to my bank account, and the ability to just tell them to send money (either electronically, or they cut the check and mail it) has been a significant quality of life improvement.
Quote from: 1995hoo on September 05, 2023, 04:40:15 PM
Quote from: hbelkins on September 05, 2023, 04:24:54 PM
Ditto on the coupon books. I'm not a fan of automatically-deducted payments. If something comes up that you need the money for, you aren't having to deal with the possibility of having it go elsewhere because you had an automatically-scheduled payment.
I don't like giving anyone else (other than Ms1995hoo) access to my bank accounts for any reason. I don't like making it any easier than it has to be for some miscreant to alter the payment amount I set up, pull an extra payment, etc.
That's two things I've never had to deal with in decades of using automatic payments. Let's count off more...
Sure, if you're scraping by, paycheck to paycheck, the automatic payments are not for you.
And I've never had my accounts messed with due to automatic payments. In fact, I've had much more trouble just with paying with credit cards in person. Had a waitress skim my card once and then other places overcharge me...never been out any money because of it, though.
Glad your way works for you.
I was offered a coupon book when I bought my current vehicle financed thru a local credit union...and I declined and made the monthly payments in person either with a live teller or dropping it in the night depository
Quote from: 1995hoo on September 05, 2023, 02:10:02 PM
Edited to add: My mother only started using electronic bill payment earlier this year after having problems with mailed checks being stolen. I convinced her it was safer, faster, and more reliable to pay electronically. There are plenty of people out there who don't "trust" electronic payments or who won't use them for various reasons.
Quote from: 1995hoo on September 05, 2023, 04:40:15 PM
I don't like giving anyone else (other than Ms1995hoo) access to my bank accounts for any reason. I don't like making it any easier than it has to be for some miscreant to alter the payment amount I set up, pull an extra payment, etc.
But isn't this also not trusting electronic payments?
Quote from: jeffandnicole on September 05, 2023, 11:10:35 PM
Quote from: 1995hoo on September 05, 2023, 02:10:02 PM
Edited to add: My mother only started using electronic bill payment earlier this year after having problems with mailed checks being stolen. I convinced her it was safer, faster, and more reliable to pay electronically. There are plenty of people out there who don't "trust" electronic payments or who won't use them for various reasons.
Quote from: 1995hoo on September 05, 2023, 04:40:15 PM
I don't like giving anyone else (other than Ms1995hoo) access to my bank accounts for any reason. I don't like making it any easier than it has to be for some miscreant to alter the payment amount I set up, pull an extra payment, etc.
But isn't this also not trusting electronic payments?
Not really because you're not giving your banking info, and the ability to withdraw money, to a creditor.
Edited to add: I've very rarely paid bills by check within the past 20 years, but in only one instance have I ever used a creditor's website to pay and that was a now-defunct credit card (Revolution Card) that I found was much slower to process payment coming from my bank compared to using their website. Interestingly, though, I've found that if I want to move money between our accounts at different banks, writing myself a check and then using either mobile deposit or the ATM to deposit it is faster than doing an electronic transfer between banks. If, for example, I were to write myself a check today, the money would post and be available tomorrow. If I were to do an electronic deposit, the money would likely be on hold until at least next Monday. I've never bothered to figure out why it takes so much longer because all that really matters to me is the knowledge that it does.
Quote from: 1995hoo on September 06, 2023, 07:35:25 AMInterestingly, though, I've found that if I want to move money between our accounts at different banks, writing myself a check and then using either mobile deposit or the ATM to deposit it is faster than doing an electronic transfer between banks. If, for example, I were to write myself a check today, the money would post and be available tomorrow. If I were to do an electronic deposit, the money would likely be on hold until at least next Monday. I've never bothered to figure out why it takes so much longer because all that really matters to me is the knowledge that it does.
That's what puzzles me. Zelle to yourself may be a faster option (I never checked that, though). But overall.... Which century it is right now? Are messenger pigeons still the thing?
Quote from: kalvado on September 06, 2023, 08:42:16 AM
Quote from: 1995hoo on September 06, 2023, 07:35:25 AMInterestingly, though, I've found that if I want to move money between our accounts at different banks, writing myself a check and then using either mobile deposit or the ATM to deposit it is faster than doing an electronic transfer between banks. If, for example, I were to write myself a check today, the money would post and be available tomorrow. If I were to do an electronic deposit, the money would likely be on hold until at least next Monday. I've never bothered to figure out why it takes so much longer because all that really matters to me is the knowledge that it does.
That's what puzzles me. Zelle to yourself may be a faster option (I never checked that, though). But overall.... Which century it is right now? Are messenger pigeons still the thing?
No, but bank scams are.
I can't speak to the above because I only transfer money within my own bank. But banks have hold periods before they may release deposited funds depending on which bank the check originates from, the amount, deposit method, time of day, day of week, and other qualifiers. These will all be mentioned in your banking agreement found online and at the bank.
As far as paying bills online, I prefer to pay via the entity's website whom I'm paying and have them draw from the bank, rather than go thru the bank and draw from the entity. 2 reasons: My money sits in the bank longer, since the entity has to pull it from the bank. Also, if there's a transmission issue at an entity or via the national transfer systems (rare but occurs...I'll see this with wires transfers at work), the entity knows I paid. If I pay thru the bank, the entity doesn't know I paid them until they receive the transmission from the bank
I've only ever had a problem one time, and that was with the now-defunct credit card mentioned in a prior post. With that said, when I have a new creditor–say, last month when the mortgage servicer sold the loan–I program the first payment or two a couple of days earlier than I might otherwise as a way of testing how long they take to post payments (in their case, I programmed the payment a week earlier than I would normally have, and I found they posted it the same day it left my bank account).
- My car loan came with a coupon book. Dealer used a small bank in another part of the state and they mailed me a coupon book. I just tossed it in a drawer and set up an electronic payment via my bank.
- Electronic payments. There are two ways to do electronic payments. One is to let the biller withdraw things from your account. The other is to pay bills from your account, which you can do monthly or make automatic in the case of a steady bill like a car payment, via your bank's website or app. With one exception, I always do the later. Possession is 9/10ths of the law, as they say. You hear the horror stories of people that get four figure water bills and the like due to some mistake. Letting a biller withdraw from your account means it will take that money and then you have to fight them to get it back. With you paying via the app, you just don't pay and make them fight you. The one exception I have made is Allstate. In my state it is very difficult and expensive to cancel somebody's car insurance. You have to send multiple certified mailing, have to tell the DMV on a particular form, and the insurer is still on the hook for the non-payer for several months into the non-renewal period. For that reason, Allstate gives me 15% discount to let them just take it from my account. Too good a deal to pass up.
Quote from: Big John on September 05, 2023, 04:34:29 PM
I had a coupon book. I sent in the payment with it but never got confirmation of the payment.
Getting the cancelled check back with the lender's endorsement on the back is confirmation. (I supposed these days you'll have to settle for your bank statement.)
Quote from: jeffandnicole on September 06, 2023, 09:00:14 AM
Quote from: kalvado on September 06, 2023, 08:42:16 AM
Quote from: 1995hoo on September 06, 2023, 07:35:25 AMInterestingly, though, I've found that if I want to move money between our accounts at different banks, writing myself a check and then using either mobile deposit or the ATM to deposit it is faster than doing an electronic transfer between banks. If, for example, I were to write myself a check today, the money would post and be available tomorrow. If I were to do an electronic deposit, the money would likely be on hold until at least next Monday. I've never bothered to figure out why it takes so much longer because all that really matters to me is the knowledge that it does.
That's what puzzles me. Zelle to yourself may be a faster option (I never checked that, though). But overall.... Which century it is right now? Are messenger pigeons still the thing?
No, but bank scams are.
I can't speak to the above because I only transfer money within my own bank. But banks have hold periods before they may release deposited funds depending on which bank the check originates from, the amount, deposit method, time of day, day of week, and other qualifiers. These will all be mentioned in your banking agreement found online and at the bank.
As far as paying bills online, I prefer to pay via the entity's website whom I'm paying and have them draw from the bank, rather than go thru the bank and draw from the entity. 2 reasons: My money sits in the bank longer, since the entity has to pull it from the bank. Also, if there's a transmission issue at an entity or via the national transfer systems (rare but occurs...I'll see this with wires transfers at work), the entity knows I paid. If I pay thru the bank, the entity doesn't know I paid them until they receive the transmission from the bank
I would buy scam-prevention thing, if the bank was serious about working with it. For one as of now, their transaction-alert texts arrive next day, if not two days after.
And there are certain things that may be implemented - like shorter hold for repeat transfers. I guess that too much data to carry for those pigeons, though.
Quote from: KCRoadFan on September 05, 2023, 12:49:33 PM
I'm currently making my car loan payments through Chase - they are processed via auto-pay, and I check the remaining balance on the Chase app every month when the payment goes through. That made me wonder: for those who have driven long enough ago to remember such a time, how were car payments made in the days before banking apps - or the Internet more broadly - became commonplace?
Having previously asked this question on Quora, a Q&A website, I remember that some of the respondents on that site mentioned coupon books that the bank (or whatever the lending entity was) would give the driver upon receiving the car, and the driver would then mail in a coupon every month along with the check for that month's payment, until the loan was paid off. What was your experience like? Anything similar to what I described?
I have payment books from 5/3 Bank for my current auto loan. I pay online, but I do have the books to mail in the coupon with a check to process payment. Now, because I don't bank with 5/3, I have to manually initially every payment online. If I had a checking or savings account with them, I could set it up to autopay.
With previous loans through my credit union, I had direct payment set up. Every two weeks on payday, the credit union processed a payment for half a monthly car payment. For that, I got two interest rate discounts (one for the direct deposit on my paycheck, one for the direct payment). I also made 26 half payments per year instead of 12 full payments, so I paid one loan off 6 months early and saved on total interest paid.
Quote from: bulldog1979 on September 08, 2023, 12:21:06 AM
I have payment books from 5/3 Bank for my current auto loan. I pay online, but I do have the books to mail in the coupon with a check to process payment.
Do they still cash the check if you make it out to 1.6666666667 Bank?
I do see the problems some people have with autopay. Just this past month, my apartment complex charged me 20 days worth of erroneous late fees, and never contacted me in any way to tell me there might be a problem. I didn't notice until my September autopay posted and it was quite a bit larger than rent plus utilities normally costs me.
I took it up right away with management, and within a week they did get the late fees taken off. But they still have that money which they'll credit towards next month's rent. In the big scheme of things, not a huge deal, but that money could be sitting somewhere else making interest. If it were a larger amount of money or if your landlord or creditor is less helpful I could easily see this becoming a bigger issue.
It varies. The coupon book was very common for student loans, auto loans, and mortgages. However, there was also "buy here, pay here" and "we finance EVERYONE" places with confiscatory interest rates where you paid every month.
The less said about "buy here, pay here" places... the better. They serve a niche yet extremely vulnerable customer.
Autopay can be a disaster if your creditor is initiating the transfer. We had a few thousand $ in credit card debt for a while and put it on autopay for the minimum due, and then usually made an additional payment each month. Then we got a windfall and decided to retire that debt, called the credit card company to make the payment the full amount of what was left. They did. You'd think that would be the end of the story? Then on the due date the following month they took several thousand $ out of our checking account again. We didn't have that much so our bank transfered the money TO them with an overdraft fee and negative balance on our account. Even though this now gave us a credit balance on our card. Bank was helpful and reversed the transfer a few days later and even waived the overdraft fee. So that should be the end of the story, right? Well, no, even though I called the credit card company and complained and they swore it was taken care of, the next month it all happened again. Overdraft, reversed by bank, etc. This time, though, instead of asking the credit card company to straighten it out I closed the account.
Even if you have plenty of money to pay the bill and no billing error happens, autopay can screw you over if you have multiple accounts and you simply have forgotten to put the money in the correct one. (I know several people who have multiple accounts so they can set aside money for the X bill by putting it in a certain account, money for the Y bill by putting it another account, etc.)
I don't practice what I preach here, but with autopay, set it to the minimum amount. As long as you pay your bill before the due date (and I would say at least a few days before the due date), it shouldn't process the autopayment.
This is supposed to be useful if you can't make your payment on time due to personal issues (hospitalization, unexpected travelling, just plain forgot, etc).
I only autopay a few items - mortgages (1st & 2nd), car loans (now paid off) and car insurance.
Michigan woman's auto-payments hid her death for over 5 years (https://www.cnn.com/2014/03/07/us/michigan-mummified-body-found/index.html)
Pfft. Autopay the statement amount on your credit card(s). No interest if paid by due date.
Makes me wonder how they come up with a minimum payment amount, actually. Seems arbitrary.
Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.
Quote from: Rothman on September 10, 2023, 12:26:38 AMMakes me wonder how they come up with a minimum payment amount, actually. Seems arbitrary.
It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.
Quote from: ZLoth on September 10, 2023, 07:52:22 AM
Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.
Quote from: Rothman on September 10, 2023, 12:26:38 AMMakes me wonder how they come up with a minimum payment amount, actually. Seems arbitrary.
It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.
How is that "teeny-tiny percentage" calculated?
Quote from: Rothman on September 10, 2023, 07:59:04 AM
Quote from: ZLoth on September 10, 2023, 07:52:22 AM
Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.
Quote from: Rothman on September 10, 2023, 12:26:38 AMMakes me wonder how they come up with a minimum payment amount, actually. Seems arbitrary.
It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.
How is that "teeny-tiny percentage" calculated?
QuoteIf you have the Capital One Quicksilver Cash Rewards Credit Card, for example, your minimum payment will be either $25 or 1 percent of your balance (whichever is greater), plus new interest, late payment fees and any past due amounts.