Public Message To All ATOT: Get overdraft protection.

[PrinceofWands]

Need an option in poll for don't use banks/other/results.

 

[Eli]

I think all of this arguing and confusion is due to different banks having different policies. It's bank to bank, so really you need to contact your bank and ask what their policies are. Making a blanket statement isn't going to work.

In the case of Wells Fargo, it is as iFX says. With Overdraft Protection, you get a single 10-15$ fee for the day, and it will happily take money out of whatever is linked to your account for the OD Protection.

It's still stupid. I hate banks. I doubt it will ever happen, but I hope one day consumers backlash against them. They rape you at every chance they get.

The one that pisses me off the most is a NSF fee. I understand an overdraft fee - it is the fee for extending you credit and allowing your transaction to go through, which is fine - even if the fees are a bit high. But a NSF fee? They try and take the money out, you don't have enough, so they put it back AND charge you 30$?

That's highway robbery.

 

[HannibalX]

edit - how is the federal reserve's .gov page? You can get personal all you want, its really not that important to me and it doesn't change anything. I've worked in banks before and I know what they called it, and I know what was written on the legal docs that I signed when I opened my account. I know it doesn't make logical sense to the consumer to use the term this way, but thats how it is historically and currently used.

[/edit]

http://www.federalreserve.gov/pubs/bounce/

overdraft protection is coverage "so that your checks do not bounce and your ATM and debit card transactions go through. With these plans, you’ll still pay an overdraft fee or a bounce coverage fee to the bank for each item. But you will avoid the merchant’s returned-check fee and will stay in good standing with the people you do business with.
"

you can also get overdraft lines of credit or linked accounts etc.

The banks came up with the word and the practice even though they are counter intuitive to most people. The banks are protecting you from defaulting.

But to us it makes more sense to call overdraft protection the stuff we buy to protect us from the banks fees. But just because it makes sense, it doesn't change the meaning of the term.

Hey look, another definition the industry doesn't follow. When there are a myriad of definitions and terms which all have different meanings to different entities you must look at the events as they occur and decide what is taking place.

If your account EVER goes into a negative balance you have ZERO overdraft protection, if you DID the account would not be NEGATIVE, the posted items would have been covered from another source PREVENTING the account from being overdrawn. An overdrawn account by definition is an account with a negative balance. So the bank paid the item and charged you a bunch of hefty fees, the account is still negative so no protection occurred.

 

[Turin39789]

Hey look, another definition the industry doesn't follow. When there are a myriad of definitions and terms which all have different meanings to different entities you must look at the events as they occur and decide what is taking place.

If your account EVER goes into a negative balance you have ZERO overdraft protection, if you DID the account would not be NEGATIVE, the posted items would have been covered from another source PREVENTING the account from being overdrawn. An overdrawn account by definition is an account with a negative balance. So the bank paid the item and charged you a bunch of hefty fees, the account is still negative so no protection occurred.

and here's a link to bankrate that shows your definition

http://www.bankrate.com/finance/checking/overdraft-protection-plans-1.aspx

and it also addresses the fact that the two versions are often named similarly and can be easily confused.

Why can't you admit that the "banking world" uses the same term to describe two different things?

The bank protected you from the fees that the grocery would have charged you if you check had bounced. They protected you from your supplier refusing to do business with you because your check bounced.

But please, keep yelling about it.

 

[HannibalX]

and here's a link to bankrate that shows your definition

http://www.bankrate.com/finance/checking/overdraft-protection-plans-1.aspx

and it also addresses the fact that the two versions are often named similarly and can be easily confused.

Why can't you admit that the "banking world" uses the same term to describe two different things?

The bank protected you from the fees that the grocery would have charged you if you check had bounced. They protected you from your supplier refusing to do business with you because your check bounced.

But please, keep yelling about it.

My time for arguing with brick walls has ended for today, thanks. I encourage you to overdraw your account as often as possible and take advantage of your bank's wonderful "protection" they offer. $30-$40 per item sure is gracious of them, especially on that $.99 pack of gum and $2.00 cheeseburger, I mean, that's protection. Who cares that your account is in a negative balance which by definition is an overdrawn account. Why would anyone pay for their purchases with their own money when you can let the bank pay it for you? Just me, but if I had to choose I'd take the $15 flat rate over the $30-$40 item for the bank's wonderful "protection" (which didn't actually occur).

 

[dullard]

He really IS a dullard.

Do you care to explain why you refuse to read the links? The links explain it pretty clearly. There is middle ground. If you don't know about the middle ground, then you are the dullard.

Link1 from the federal reserve:

Many banks (as well as savings and loans and credit unions) offer "courtesy overdraft-protection," or "bounce coverage," plans so that your checks do not bounce and your ATM and debit card transactions go through. With these plans, you’ll still pay an overdraft fee or a bounce coverage fee to the bank for each item. But you will avoid the merchant’s returned-check fee and will stay in good standing with the people you do business with.

Banks, savings and loans, and credit unions may provide other ways of covering overdrafts that may be less expensive. Ask your bank about these options before making your choice. You may be able to: Link your checking account to a savings account you have with the bank

Notice how a linking plan is different from a protection plan.

Link2:

There's a good chance that your bank account is enrolled in some type of overdraft protection program even if you haven't asked for it. Under fire from the Federal Reserve Board and Congress, some banks -- such as Chase and Bank of America -- are revising their overdraft policies to require new customers to opt in when they open an account. But as Day points out, "That doesn't do anything for the millions of customers already ensnared in this."

The Fed released new overdraft rules Nov. 12, 2009, requiring all banks and credit unions that issue ATM and debit cards to get consumers' consent before enrolling them in overdraft programs. The rule is mandatory after July 1, 2010, and banks cannot charge existing cardholders overdraft fees after Aug. 15, 2010, if they haven't explained overdraft protection and fees and gotten consumers' permission beforehand.

Until that rule takes effect, if you find yourself racking up overdraft fees, you have a couple of options. You can opt out of the program and have your charges denied if you overdraw on the account. Or you can have your checking account linked to your savings account or a line of credit, advises Liberman.

Notice how you have three options, their default plan, a linking plan, and you can opt out.

Link3:

Some banks offer a type of overdraft protection. It was a variety of names: overdraft protection is the most common. This means that the bank will allow you to overdraw your account up to a certain amount, and they will still pay the checks or debits. You will be charged a fee per item that they pay. The fee is similar to the returned item fee.

Another option is an overdraft account or a cash reserve account. This is a line of credit that is attached to your checking account. When you overdraw the bank will transfer the money into your account to cover the negative balance. There is usually a fee of a few dollars per transfer.

Finally some banks and credit unions may give you the option to tie one of your accounts to your checking account to use in case you overdraw your account.

Again, multiple options.

Link4
Link5
Link6
Etc. All of these links say you have three choices: take the defualt plan of ~$35 fees, link to a checking account, or opt out. But of course, I'm the idiot because I say what thousands of links say that there are three options.

 

[Turin39789]

My time for arguing with brick walls has ended for today, thanks. I encourage you to overdraw your account as often as possible and take advantage of your bank's wonderful "protection" they offer. $30-$40 per item sure is gracious of them, especially on that $.99 pack of gun and $2.00 cheeseburger, I mean, that's protection. Who cares that your account is in a negative balance which by definition is an overdrawn account. Why would anyone pay for their purchases with their own money when you can let the bank pay it for you? Just me, but if I had to choose I'd take the $15 flat rate over the $30-$40 item for the bank's wonderful "protection" (which didn't actually occur).

Exactly! It's freaking retarded, but it is what it is. And you are among the 82% polled who want to have the option to choose. But the banks didn't asl you because they are miserly old scrooges. Unfortunately for them, as part of the new banking regulations they will have to give ask consumers to opt in to ovderdraft protection instead of automatically putting it on every account. It starts in June.

http://articles.moneycentral.msn.com/Banking/BetterBanking/DeclineMyDebitCardPlease.aspx




Of course there source for the new legistlation is the federal reserves website that you ignored before as providing " a definition the industry doesn't follow". Except its a law now, so I guess they will follow it.

http://www.federalreserve.gov/newsevents/press/bcreg/20091112a.htm

 

[0roo0roo]

If I don't have it, I don't spend it. Seems simple enough.

like it or not the system is broken and predatory. the banks basically prey on the less well off in society. its a completely artificial system they setup to "help" you with overdrafts. whether or not people make mistakes or are careless doesn't matter, there should be a limit to the destruction companies can do to society in the name of squeezing profits out of people.

 

[KeithTalent]

I have never had it and never will. Completely unnecessary.

KT

 

[BurnItDwn]

overdraft? huh? Why on earth would I want to do that?

money in account > money spent from account = no overdraft

 

[allthatisman]

I have a debit card and an AMEX card, but my sole source of payment is cash... everybody takes it, it's easy to see how much you spent, and it's just generally easier to have for cabs, tips, small items etc... The banks WANT you to use that debit card, which is precisely why I avoid it as much as possible.

 

[glugglug]

this is why you use a check register. it's the paper thingy banks give you when you open an account or request more checks. if you balance your checkbook you'll never have to worry about things like overdraft fees and what not.

This is wrong. It is standard practice for the bank to wait 3+ business days before your balance reflects your deposits, and to re-order your withdrawals each day largest first so that if you overdraft, the maximum possible number of transactions will be affected.

 

[JMapleton]

Need an option in poll for don't use banks/other/results.

Who doesn't use a bank?

 

[PrinceofWands]

Who doesn't use a bank?

*raises hand*

 

[zinfamous]

Who doesn't use a bank?

I keep my money in my mattress, where I stand guard 16 hours a day with a loaded shotgun.

 

[RoloMather]

The way my bank works is that I get a line of credit:

Say i have $100 in my checking.

I write a check for $200.

My bank pays the $200, I am now at $-100.

The interest on that $-100 is like 12%? So it cost me $0.05 per day interest.

I deposit in $1000 after I realize I had negative balance.

I now have $900.

No overdraft fee, no fee of any kind.

It's pretty awesome.

 

[Bignate603]

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.

This right here is proof that you don't actually support yourself. Here's why...

1. The interest rate difference between many checking accounts and savings accounts is minimal. The difference between my savings account and checking account is only 0.02% which means that for each $1k I keep in my checking account I only lose 20 cents in interest. I honestly could care less about that much money

2. Your time apparently isn't worth much. You're spending a decent amount of time tracking your finances down to the penny and literally only getting pennies in return for your efforts.

3. For people that are supporting themselves they typically have a decent amount of things going in and out of their account. Screw up just ONCE when you have only $1 in your account and you've wiped out any real savings you've had for the last decade. Also, if something happens and you need to do more than 6 transfers from your other accounts you've just thrown away years of savings.


Sure, if you've only got a couple things you need to pay each month it's easy but once you get out of your parent's house and start paying for your own things you'll realize that it's not practical to do. This is something that makes your age pretty obvious.