overdraft fees

[bearxor]

Originally posted by: Oakenfold
OP you may want to look into if your financial institution has a line of credit that can act as overdraft, that way you pay interest instead of overdraft fees. It will overdraft up to your limit, like a credit card.

They still charge you an overdraft fee for this, at least in Wachovias case. Pe charge. It's basically worthless.

Originally posted by: Oakenfold

Originally posted by: lupi
I personally love those banks that will arrange the accounting so that in a single day when you have a deposit they will do all the withdrawals first so that you could hit the overdraft and then input the deposit.

Banks arranging the accounting? Sounds like the consumer not balancing a checkbook. Why would you be writing checks or having electronic drafts debit your account with the funds not in the account to begin with?:Q

This DEFINITELY happens. Just to elaborate, there were numerous times that I was with Wachovia that a little after midnight on a payday I could check my balance and see my paycheck and have tons of money with no overdraft fees. Six hours later I wake up and check it only to see that they have cleared several charges before they counted my paycheck.

I'm surprised I stayed with them as long as I did. I went with a bank that does real-time banking. I've not had a single problem since. You may chalk it up to piss-poor money management or something, but I've not changed my purchasing habits. I've also not overdrafted since switching banks... Maybe it's not me...

 

[Pabster]

Originally posted by: spidey07
Thoughts are it is a punishment so that you don't do it again and screw the bank.

So I think they should remain high to prevent engaging in this activity of writing checks you can't fulfill. You're basically lying. Lying should be punished.

Agreed. The fee isn't high just because the bank wants easy money (of course they do!), it is also encouragement to avoid paying such fees in the future.

 

[Oakenfold]

Originally posted by: bearxor

Originally posted by: Oakenfold
OP you may want to look into if your financial institution has a line of credit that can act as overdraft, that way you pay interest instead of overdraft fees. It will overdraft up to your limit, like a credit card.

They still charge you an overdraft fee for this, at least in Wachovias case. Pe charge. It's basically worthless.

Originally posted by: Oakenfold

Originally posted by: lupi
I personally love those banks that will arrange the accounting so that in a single day when you have a deposit they will do all the withdrawals first so that you could hit the overdraft and then input the deposit.

Banks arranging the accounting? Sounds like the consumer not balancing a checkbook. Why would you be writing checks or having electronic drafts debit your account with the funds not in the account to begin with?:Q

This DEFINITELY happens. Just to elaborate, there were numerous times that I was with Wachovia that a little after midnight on a payday I could check my balance and see my paycheck and have tons of money with no overdraft fees. Six hours later I wake up and check it only to see that they have cleared several charges before they counted my paycheck.

I'm surprised I stayed with them as long as I did. I went with a bank that does real-time banking. I've not had a single problem since. You may chalk it up to piss-poor money management or something, but I've not changed my purchasing habits. I've also not overdrafted since switching banks... Maybe it's not me...

So schedule your debits to occur x number of safety days after your paycheck hits. This is no different than writing a check today with zero dollars in your account and planning on depositing your paycheck friday to attempt to cover the checks you wrote today. You are authorizing payment with no funds in the hope that there will be funds when the check clears (whether electronic or paper, eft, ach whatever, it's still a debit).

I agree the whole thing of taking debits before credits is rather lame but if you manage your bills a few days difference you will be just fine.

 

[spidey07]

Originally posted by: Pabster

Originally posted by: spidey07
Thoughts are it is a punishment so that you don't do it again and screw the bank.

So I think they should remain high to prevent engaging in this activity of writing checks you can't fulfill. You're basically lying. Lying should be punished.

Agreed. The fee isn't high just because the bank wants easy money (of course they do!), it is also encouragement to avoid paying such fees in the future.

Not only that, but writing bad checks is also against the law. So in effect the bank is doing you a favor by not turning you in for prosecution.

 

[lupi]

Originally posted by: Oakenfold

Originally posted by: bearxor

Originally posted by: Oakenfold
OP you may want to look into if your financial institution has a line of credit that can act as overdraft, that way you pay interest instead of overdraft fees. It will overdraft up to your limit, like a credit card.

They still charge you an overdraft fee for this, at least in Wachovias case. Pe charge. It's basically worthless.

Originally posted by: Oakenfold

Originally posted by: lupi
I personally love those banks that will arrange the accounting so that in a single day when you have a deposit they will do all the withdrawals first so that you could hit the overdraft and then input the deposit.

Banks arranging the accounting? Sounds like the consumer not balancing a checkbook. Why would you be writing checks or having electronic drafts debit your account with the funds not in the account to begin with?:Q

This DEFINITELY happens. Just to elaborate, there were numerous times that I was with Wachovia that a little after midnight on a payday I could check my balance and see my paycheck and have tons of money with no overdraft fees. Six hours later I wake up and check it only to see that they have cleared several charges before they counted my paycheck.

I'm surprised I stayed with them as long as I did. I went with a bank that does real-time banking. I've not had a single problem since. You may chalk it up to piss-poor money management or something, but I've not changed my purchasing habits. I've also not overdrafted since switching banks... Maybe it's not me...

So schedule your debits to occur x number of safety days after your paycheck hits. This is no different than writing a check today with zero dollars in your account and planning on depositing your paycheck friday to attempt to cover the checks you wrote today. You are authorizing payment with no funds in the hope that there will be funds when the check clears (whether electronic or paper, eft, ach whatever, it's still a debit).

I agree the whole thing of taking debits before credits is rather lame but if you manage your bills a few days difference you will be just fine.

For most of the people in this forum, you'd probably never run into this type of event. But for those that deal in smaller quantities of money, where living paycheck to paycheck has a much truer meaning, arranging the order of transactions of delaying ACH deposits until activating withdrawals is pretty crappy. And check some consumer sites out there cause it has happened before.

 

[Pabster]

Originally posted by: spidey07
Not only that, but writing bad checks is also against the law. So in effect the bank is doing you a favor by not turning you in for prosecution.

Agreed.

 

[Oakenfold]

Originally posted by: lupi

For most of the people in this forum, you'd probably never run into this type of event. But for those that deal in smaller quantities of money, where living paycheck to paycheck has a much truer meaning, arranging the order of transactions of delaying ACH deposits until activating withdrawals is pretty crappy. And check some consumer sites out there cause it has happened before.
[/quote]

Good point, this should be described in the account disclosure provided at the time the account is opened however if anyone is ever in that position (where they are living paycheck to paycheck) they should discuss it with their financial institution, especially if they are a member of a Credit Union. A line of credit would be just the ticket to add a much needed cushion, well one that doesn't work like the Wachovia loc that you describe, just one that charges a reasonable rate of interest on the balance. That way instead of paying $25-$35 one would pay pennies on the dollar (depending on the interest).

Originally posted by: Pabster

Originally posted by: spidey07
Not only that, but writing bad checks is also against the law. So in effect the bank is doing you a favor by not turning you in for prosecution.

Agreed.

Indeed it is. I've heard of people that have been prosecuted for bad checks that were less than the overdraft fee that we are discussing. :Q

 

[0roo0roo]

for atm debit its pretty bad, they will just let a person keep using the card even if the account has gone dry. its pretty near exploitation at that point, you can accidentally go 50 cents over and be knocked with an overdraft charge when frankly they should have rejected that transaction to begin with. i did that once, they talked like they were doing me a favor by essentially giving me a loan i didn't ask for. credit cards hit max and stop working, whats so hard about doing it with debit in this wired world. they do it because they can get away with it.

they are doing something about it in the uk
http://redtape.msnbc.com/2007/01/debit_cards_fue.html
http://www.theherald.co.uk/mos..._overdraft_charges.php
http://www.claimbackfees.com/about_us.html
hopefully reform comes here as well

 

[dmcowen674]

Originally posted by: Oakenfold

Originally posted by: lupi

For most of the people in this forum, you'd probably never run into this type of event. But for those that deal in smaller quantities of money, where living paycheck to paycheck has a much truer meaning, arranging the order of transactions of delaying ACH deposits until activating withdrawals is pretty crappy. And check some consumer sites out there cause it has happened before.

Good point, this should be described in the account disclosure provided at the time the account is opened however if anyone is ever in that position (where they are living paycheck to paycheck) they should discuss it with their financial institution, especially if they are a member of a Credit Union. A line of credit would be just the ticket to add a much needed cushion, well one that doesn't work like the Wachovia loc that you describe, just one that charges a reasonable rate of interest on the balance. That way instead of paying $25-$35 one would pay pennies on the dollar (depending on the interest).

Originally posted by: Pabster

Originally posted by: spidey07
Not only that, but writing bad checks is also against the law. So in effect the bank is doing you a favor by not turning you in for prosecution.

Agreed.

Indeed it is.

I've heard of people that have been prosecuted for bad checks that were less than the overdraft fee that we are discussing. :Q[/quote]

arranging the order of transactions of delaying ACH deposits until activating withdrawals is pretty crappy

In many cases it is the banks themselves causing the overdraft with the delayed ACH deposit.

It's called Check 21 that was designed by the GOP for the banks and signed by the Bush almighty in summer of 2006.

It made it legal for the bank to hold your ACH deposit for an in state deposit for 3 to 5 days but allows instant debits on your account by creditors. For out of state deposits they can hold your money for 11 days.

It's legal thievery no matter what you call it

 

[Darwin333]

Originally posted by: ZippyDan

anyways i see loan companies getting sued every now and then for unfair practices even though customers signed and "agreed" to stupid things. it seems to me that we consumers should force the banks to change their ways

Do you honestly think that the banks are going to give up one of their major revenue sources from general public checking accounts without replacing it with another source of revenue?

Someone mentioned earlier, there is a reason that checking accounts are now free (as long as you follow the rules).

Not to mention the fact that most (if not all) banks offer a reasonable solution for your problem.

 

[Wreckem]

My credit union charges $15 and they automatically refund alot of them because I have direct deposit.

 

[Oakenfold]

Originally posted by: dmcowen674
It's called Check 21 that was designed by the GOP for the banks and signed by the Bush almighty in summer of 2006.

It made it legal for the bank to hold your ACH deposit for an in state deposit for 3 to 5 days but allows instant debits on your account by creditors. For out of state deposits they can hold your money for 11 days.

It's legal thievery no matter what you call it

I beg to disagree. Check21 was implemented to provide financial institutions with an alternative to check processing through remote deposit capturing and check imaging. Do checks process faster now? You bet! Bottom line as it was before if you don't have the money don't write the check.

Please provide your source under Regulation E where it states that ACH deposits are subject to holds for the time periods you discussed above. I am not familiar with Reg E stating this, and it may well.

What I am aware of is Reg CC governs check holds for a similar time period, which does not govern check21 (Reg E does, well at least the ACH part). REG CC has been in existence for a while, before check21 was created (1988 to be exact). So I'm failing to see exactly how check21 was designed to create "legal thievery" when there's already been a regulation on paper checks that has been in existence for quite some time.

Please do provide the CFR indicating your source.

 

[spidey07]

Originally posted by: dmcowen674
In many cases it is the banks themselves causing the overdraft with the delayed ACH deposit.

It's called Check 21 that was designed by the GOP for the banks and signed by the Bush almighty in summer of 2006.

It made it legal for the bank to hold your ACH deposit for an in state deposit for 3 to 5 days but allows instant debits on your account by creditors. For out of state deposits they can hold your money for 11 days.

It's legal thievery no matter what you call it

And all the while those moves pushed this roaring economy! Love it. Bush almighty forever. It's pure genius.

4 more years!!!!!!!!!!!!!!!!!!!!!!

:thumbsup:

 

[jandrews]

I have had 1 or 2 of these incidents in my life due to just not paying attention typically around rent time. Also, if you have an overdraft and then pending transactions things get ugly. At any other time they just assort your charges in the order given i.e

45
52
24
102
11

when they see an overdraft they go

101
52
45
24
11

to maximize the amount of overdraft fees one has to pay, I am suprised changing the order of the transactions to maximize bank profit is legal but what can you say.

Anyway, many banks offer overdraft protection or bank line of credit which basically allows you to go over your account and it will deposit money in your acct at an interest rate.

 

[mugs]

Originally posted by: dmcowen674

It made it legal for the bank to hold your ACH deposit for an in state deposit for 3 to 5 days but allows instant debits on your account by creditors. For out of state deposits they can hold your money for 11 days.

It's legal thievery no matter what you call it

That's a little misleading there, Dave. Doesn't surprise me much. They can't typically hold your money for 11 days:
http://en.wikipedia.org/wiki/E...Funds_Availability_Act

 

[IceBergSLiM]

I have had debit cards with two banks in my life. One a small credit union in CT. 4-5 branch offices. The other bank of america.

For some reason.....the small bank has the capability to deny transactions that would put me into negative but BOA will wave through as many charges as I'm capable of making. I've gotten into verbal shouting matches many times asking them why and when I authorized them to extend this type of credit to me. The only answer is so they can deliberately fvck you as hard as possible. The shit thing is for bank of america they will reserve funds for online bill payments but for debit transactions they do not reserve the funds. They label "pending" and allow you to keep charging up a storm. Its bullshit. I am switching back to my smaller bank shortly.

 

[krunchykrome]

Checking accounts for dummies:
Rules to remember

Rule 1: When you spend money, debit it from the checkbook ledger. In theory, it's no longer in your account, even though the transaction/check may not have cleared yet.

Rule 2: Never refer to your "available" balance. Refer to your checkbook ledger balance.

Rule 3: Community banking is a business. Don't start b!tching if you get charged an overdraft fee when you couldnt manage a simple checkbook in the first place.

 

[AccruedExpenditure]

Because the banks don't like it when you take a loan without asking them... I understand that unexpected or unplanned expense do occur, but if you find yourself suddening being asked to pay more money than you have, create a plan, take a quick loan, and repay it.

 

[JeffreyLebowski]

Wamu pissed me off when I opened my account, I had my asvings tied to it so that if I did Overdraft it would pull from my checking so I didn't get a NSF fee of $30. Well the one time i messed up and my checking account went over, and it pulled the rest from my savings, I got charged a $25 fee for the bank to initiate the transfer from my savings to my checking. WTF is that. They are determined to get a fee from you regardless.
I called and complained and got the fee reversed and haven't had any issues since.

 

[TwiceOver]

The only time my account was going to over draft, they called me and told me to deposit $2.xx before two.

That was years ago, remember, when doing right by your customer was the respectful thing to do.

Now my wife's bank on the other hand...

Takes checks Largest to smallest, therefor if a large check overdrafts the acct. every check after that is charged. Not to mention the ATM fees. $10 out of state, $5 non-bank owned ATM fee, $3 fee at the ATM. Her $20 withdrawl was actually $38.

 

[alkemyst]

Originally posted by: CadetLee

when you overdraw, you are basically borrowing money from the bank to cover your ineptitude. so charge an % based fee (like interest) on the borrowing of that money. make it a high percent. but at least that would be more reasonable than the current standard

Then get an overdraft protection line of credit. Problem solved...

On many of these you are still hit with a fee, it's just that they don't deny the charge.

 

[alkemyst]

Originally posted by: mugs
How much do you pay for your checking account? $0? Same here. Same with just about everyone else in this country. Not so years ago. They've shifted their revenues from account fees to penalty fees.

There is a difference between free checking and no fee/balance type checking.

I used WAMU's totally free mostly for the convenience of their ATM's. I also have a couple CitiBank accounts that will whack me pretty good if my balances drop below a threshold.

One of the biggest pluses I used the Citibank's for were International Transfers. Now that WAMU does them free ($60 value) it makes the citi account less needed, but it has a decent yield for a liquid account.

The only drawback is with Citi I could do my transfers online, with WAMU you have to go in, sign a paper that basically says you aren't stupid and sending your money to a stranger and then deal with their CSR trying to figure out the forms.

WAMU is the ghetto of banks though, I hate when I have to go inside.

 

[ZippyDan]

Originally posted by: TwiceOver
Now my wife's bank on the other hand...

Takes checks Largest to smallest, therefor if a large check overdrafts the acct. every check after that is charged.

Originally posted by: bearxor
Guess what, because it was a pending charge, they charged me an overdraft fee. WTF? You've not even paid it. Not only that, but they stack the charges so that the largest clears first, regardless of the order they were made.

So if you have $60 in the bank - you make a $3 charge, then a 1.50, then a $12, then a $6, then a $55. Even though they have not paid any of these, they will stack these so that they clear the $55 first. Now, the $12. Guess what, overdraft. Now the $3 and $1.50 clear, overdraft fee on each.

Originally posted by: jandrews
I have had 1 or 2 of these incidents in my life due to just not paying attention typically around rent time. Also, if you have an overdraft and then pending transactions things get ugly. At any other time they just assort your charges in the order given i.e

45
52
24
102
11

when they see an overdraft they go

101
52
45
24
11

to maximize the amount of overdraft fees one has to pay, I am suprised changing the order of the transactions to maximize bank profit is legal but what can you say.

how is this legal/ethical/tolerated?

 

[kranky]

Originally posted by: ZippyDan
how is this legal/ethical/tolerated?

Because they tell you that in the terms and conditions when you opened your account. They believe that processing the largest transactions first is better for the customer, because for most people the largest ones are the most important (mortgage payment, insurance, car payment) and customers are better off not bouncing a mortgage check in order to process a $15 check to the dry cleaners, etc.

Not saying that it IS best, but that's their justification.

 

[FoBoT]

get overdraft protection line of credit

or use a credit union that will move money from a savings account to cover the difference