Some HELOC customers routinely overpay their HELOC balance. For example, they pay back $550 when $548.83 is due. Although overpaying can make it easier to balance financial records, it’s generally a bad idea.

Usually, HELOC lenders will keep the positive balance on the books and credit the borrower the next time money is owed. However, if the balance is very low the bank may just pocket the change.

A recent Consumerist article  shares the story of a HELOC customer who lost his overpayed balance:

“Today I got my statement for this month. There was one transaction, on the closing day of the month, for $0.78. The transaction was an “ACCOUNT ADJUSTMENT”. My balance was now $0.00, instead of -$0.78.

I called customer service to ask about this transaction. The agent first said that the note on the transaction stated it was an additional interest charge for 2007. That didn’t make sense, and I told her it looked to me like Wachovia just took my money away from me. After putting me on hold, she came back to tell me that I was right. “The account will automatically zero out if it is less than $1.00.”

It may not be a lot, but over the next 10 years a dollar here and there can really add up. Best bet: if you don’t want your HELOC lender to pocket your overpayments, always write a check for the exact amount owed.

Tags | Heloc, HELOC risks