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Public Message To All ATOT: Get overdraft protection.

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Do you have overdraft protection?

  • Yes, I'm responsible.

  • No, I'm irresponsible.

  • Yes, I'm responsible.

  • No, I'm irresponsible.

Results are only viewable after voting.
I tried to get overdraft protection back when I opened my checking account, but they said No? Funny thing is that they later gave me a CC with a $10k limit. I've never tried again to add the overdraft protection as I almost always use a CC anyway.
 
fleabag said:
lost interest... This is why I keep $1 in my checking accounts and put the rest into my somewhat high yield savings account. I mean literally, if I have 1 cent over $1 and I don't plan on paying for anything, I'll transfer it out of the savings account as I don't want to lose out on a penny or two of interest.
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So you only spend money 4 times a month? If you actually did what you claim you would be limited to 4 total purchases a month assuming that each purchase is over $1 and you transfer money from savings to checking to cover the purchase. If you don't know what I'm talking about don't sweat it, we all know you're full of it.
 
iFX said:
So you only spend money 4 times a month? If you actually did what you claim you would be limited to 4 total purchases a month assuming that each purchase is over $1 and you transfer money from savings to checking to cover the purchase. If you don't know what I'm talking about don't sweat it, we all know you're full of it.
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Not if you use a credit card, you would only need to transfer when you pay your cc.
 
Go down to your bank and get yourself some overdraft protection.
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There are two forms of overdraft protection. One is linking another account to your primary account, it can be a checking, savings or money market in most cases. The second type is a CC from the bank linked to the primary account.

The bank will still charge you a fee if you overdraw the primary account, don't forget this, it's just a smaller fee, usually in the $10-$15 range. So, you overdraw, the bank transfers funds from a linked account or charged the item to a linked CC to cover the purchase.

The big flaw in this is that irresponsible people 1.) Can't Get a CC for overdraft protection, they will be declined and 2.) Don't have any extra money to put in a linked checking, savings or MM account. All their funds are in checking.
 
iFX said:
There are two forms of overdraft protection. One is linking another account to your primary account, it can be a checking, savings or money market in most cases. The second type is a CC from the bank linked to the primary account.
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On mine, I do not think they charge a fee, all to be honest I've never overdrafted yet. I can transfer money in and out of my checking account from my line of credit though with only paying monthly interest.
 
Call your bank, they do most likely. Transfers you make via online banking typically don't have a fee. When the bank has to make the transfer because you post items that you can't pay from the account you specified they charge a fee most of the time in the $10-15 range; this is a one time fee, not per item like typical overdraft fees. Read your member agreement or call the bank.
 
And of course the alternative to ALL of this is that you keep a balance sheet for all your accounts which includes all your purchases, withdrawals, deposits and includes a running balance. If you do this, you will never overdraw your account so long as you don't spend more than your current balance. No, online banking is not an alternative to this. No, calling your bank once a day for a balance is not an alternative to this.

If you do this and somehow your account does become overdrawn any fees will be refunded to you by either the vendor or the bank since they made the error, not you.
 
Ummm... I thought overdraft protection was what got these people into their $30+ fees? If you opt out of overdraft protection you cannot spend what you don't have and the transaction is declined, thus no fees.
 
TwiceOver said:
Ummm... I thought overdraft protection was what got these people into their $30+ fees? If you opt out of overdraft protection you cannot spend what you don't have and the transaction is declined, thus no fees.
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No they're writing checks without overdraft protection and the bank charges you an overdraft fee if they pay the check for you.

If you write a check for a million dollars I would imagine they're not going to pay it and then check you $39 or whatever, but it's for a small amount.

Overdraft is when the bank puts money in your account when you overdraft and you pay daily interest charges, which is usually less than a dollar a day. At least this is how it's done at my bank.
 
JMapleton said:
No they're writing checks without overdraft protection and the bank charges you an overdraft fee if they pay the check for you.

If you write a check for a million dollars I would imagine they're not going to pay it and then check you $39 or whatever, but it's for a small amount.

Overdraft is when the bank puts money in your account when you overdraft and you pay daily interest charges, which is usually less than a dollar a day. At least this is how it's done at my bank.
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Ohhh yeah... I forgot about paper checks.
 
JMapleton said:
Overdraft is when the bank puts money in your account when you overdraft and you pay daily interest charges, which is usually less than a dollar a day. At least this is how it's done at my bank.
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You forgot about the $35 fee per overdraft ($35 is the MEDIAN fee for larger banks in 2009, many charge more and the fees are still expected to increase). Sure, the interest you pay is minimal, but that $35 per overdraft is really expensive (and one overdraft usually causes a cascade of other overdrafts each with their own fee). Overdraft protection WAS a good idea for people in that situation. Now, with increased overdraft protection fees, it often is more costly to have overdraft protection than to bounce a check.

Instead, link your checking account to a line of credit or your savings account. If you go over, it'll take money from the other account with minimal if any fees ($10 or less). And if there is a fee, most banks have a cap of one fee per day, no matter how many times you go over on your checking account that day. Read Me.
 
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TwiceOver said:
Ummm... I thought overdraft protection was what got these people into their $30+ fees? If you opt out of overdraft protection you cannot spend what you don't have and the transaction is declined, thus no fees.
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Wrong. Happens all the time.

Here is a scenario.

You have $500 in your checking account and make a purchase for $400. The bank is notified instantly and your "available balance" drops to $100 but the transaction hasn't actually occurred yet, bank transactions occur Monday-Friday overnight, they don't happen during the day or on the weekend - this is called processing.

Now, let's say the vendor doesn't actually debit your account for 7 business days. You look at your online banking and see a pending transaction for $400 though but after the 7th day it drops off and your balance returns to $500! Why? The vendor hasn't submitted the transaction yet. So now, like a doofus you think you have $500 because your online banking said you do, so, you go out and make a purchase for $300. This vendor is on the ball and submits the transaction that day, so for today your available balance falls to $200 and the next day your actual balance reflects this after processing, you have an actual balance of $200.

Now the first vendor, finally submits his transaction for $400. Remember, the bank ALREADY authorized this transaction over a week ago because they saw you had enough money in the account. So processing happens, the bank pays the vendor the $400 but wait, you don't have that much! The bank fronts the money for you and charges you a fee. So, now you owe the bank $200 + any fees they tag on you, usually $40 per item.

People run into problems when after they have overdrafted several more items post which are typically $40 a pop. If you don't pay the bank within a week they charged you another $40 for having an extended overdraft. You can easily end up paying a hunk of money for tiny purchases like $5 at McDonald's or $15 at the gas station.

Of course, this could ALL have been avoided if you had JUST KEPT YOUR BALANCE SHEET UP TO DATE!!
 
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dullard said:
You forgot about the $35 fee per overdraft ($35 is the MEDIAN fee for larger banks in 2009, many charge more and the fees are still expected to increase). Overdraft protection WAS a good idea for people in that situation. Now, with increased overdraft protection fees, it often is more costly to have overdraft protection than to bounce a check.

Instead, link your checking account to a line of credit or your savings account. If you go over, it'll take money from the other account with minimal if any fees ($10 or less). And if there is a fee, most banks have a cap of one fee per day, no matter how many times you go over on your checking account that day.
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If you actually HAVE overdraft protection it is a one time fee typically in the $10-15 range for unlimited items as long as you can pay them from the linked account or linked CC. The $30-40 fees are per item for people without overdraft protection typically.
 
iFX said:
If you actually HAVE overdraft protection it is a one time fee typically in the $10-15 range for unlimited items as long as you can pay them from the linked account or linked CC. The $30-40 fees are per item for people without overdraft protection typically.
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No, you have it backwards.

Option #1) No protection of any kind: bounced check fee (typically $25-$30). Average non-sufficient-fund fee is under $30.
Option #2) Overdraft protection: ~$35 fee + interest. Average overdraft fee is $34.
Option #3) Linked account: $0-$10 fee, no interest since it is your own money. Linked accounts are often $10 or less.

Read my previous link. Another link describing how banks are abusing the overdraft protection idea to turn it into a cash cow for them.
 
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dullard said:
No, you have it backwards.

Option #1) No protection of any kind: bounced check fee (typically $25-$30). Average non-sufficient-fund fee is under $30.
Option #2) Overdraft protection: ~$35 fee + interest. Average overdraft fee is $34.
Option #3) Linked account: $0-$10 fee, no interest since it is your own money. Linked accounts are often $10 or less.

Read my previous link. Another link describing how banks are abusing the overdraft protection idea to turn it into a cash cow for them.
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No, you have it wrong.

If you have NO overdraft protection you will be charged typically $30-40 for each item that posts to the account and after several days you will be charged an extended overdraft fee. This is with 99% of banks.

There is no middle ground with this. There is no middle option.

If you HAVE overdraft protection via a linked checking, savings or money market account or CC you will typically be charged a FLAT $10-$15 fee for any items that post THAT DAY which you are ABLE TO PAY from the linked account or linked CC.

There is no MIDDLE option. If you are being charged a $30-$40 fee then you have ZERO overdraft protection.

You either have it or you don't. Non-sufficient funds or overdraft fees are terms used at will by banks, they are not standard or regulated. You can call it what you want, you post an item you can't pay for and you will be charged a $30-$40 typically depending on the bank.
 
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iFX said:
If you HAVE overdraft protection via a linked checking
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If it is linked checking then it is NOT overdraft protection. That is your error. Please read the links and educate yourself. There is no reason to make a fool of yourself anymore by posting blatantly false information.

Linked to checking is what people want. That is far better than the standard overdraft protection. At least you are advising the proper product (linking accounts), even though you are using the wrong name.

Overdraft protection = bank pays your overdraft with the banks money. Linked account = bank pays your overdraft with your money (just from another account). It is a subtle difference, but a very important difference in reality. The confusing thing is that some banks have very similar terms for the two different protection methods.
 
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Rule of thumb: If you think you'd ever need overdraft protection for ANY reason, you shouldn't keep money in the bank.
 
Why have overdraft protection if you're just RESPONSIBLE with your money? I check my online bank statement daily to make sure I'm not going to go over.
 
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