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Thread: Overdraft

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    Super Moderator no1mad's Avatar
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    Overdraft

    So I let one account go into overdraft. The last purchase had a positive balance, but went into overdraft by less than a dollar. Okay, one fee and everyone should be happy, right? Did not make them a priority as wife is unemployed, and every cent that I make is needed for survival.

    Got a call from my mom. We have a joint account that I have never used (it's pretty much a way to access funds after her passing). Apparently, these two accounts were somehow linked. The bank took upon itself to transfer the outstanding balance out of her account- $219!

    Now the only way I can think that amount got to be so high is: the check card I got when I opened the "free" checking account was in reality a secured credit card? The bank in question just had a class action lawsuit filed against it yesterday over how it processes overdrafts...

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    Banks are a pain like that. Last time I had that issue (unknowingly of course) the bank waited a couple days to send me the notice, then it took a couple to show up, and then a weekend rolled around before I could get to my school mailbox. Now I have it set so that they reject it rather than overdraft the account.

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    Super Moderator no1mad's Avatar
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    Yeah, well I was planning on closing the account anyway. Just found the latest statement- they charged me $5 per day, every business day (M-F) as an "extended overdraft". WTF? Seriously??

    Mind you, I've dealt with overdraft before. It's been a few years and with a different bank (that I'm still with). They just charged a one time fee per occurrence and all was cool.

    Been thinking about possibly joining a credit union- this just may push me over the edge.

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    Senior Member skiahh's Avatar
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    Quote Originally Posted by no1mad View Post

    Been thinking about possibly joining a credit union- this just may push me over the edge.
    Why have you been waiting? 99.9% of all banks are just out to take every cent of yours... and NOT give it back! If you can bank with USAA FSB, they're in that .1% of OK banks.

    As for all the fees, you might want to check on them... $5/day might be illegal now.
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    Bring May Flowers aprilm's Avatar
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    Quote Originally Posted by skiahh View Post
    As for all the fees, you might want to check on them... $5/day might be illegal now.
    Actually, I think as long as someone has "opted in" to the overdraft coverage, the bank can charge up to 4 overdrafts (of no more than $25 each or something) per day... I could be wrong, but I'm sure I've read that in several places.

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    Senior Member Caspar_s's Avatar
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    Wow. Our bank covers us up to -$100. At the end of the month if the balance isn't above 0 we get a $4.97 charge and an interest charge on the amount we were under for the month - $0.44 last month.

    We love our bank. No charges for debit or withdrawals or transfers or anything you normally do. We also get points for everything we spend to go toward groceries (affiliated with a grocery store)

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    Super Moderator no1mad's Avatar
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    Stopped by one of the branches to close that account. Informed that it already was. Inquired about the two accounts somehow being linked (I don't recall linking them when I set my account up). Stone wall- informed that I would have to go to the location where I opened the account originally to find out.

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    Quote Originally Posted by no1mad View Post
    Stopped by one of the branches to close that account. Informed that it already was. Inquired about the two accounts somehow being linked (I don't recall linking them when I set my account up). Stone wall- informed that I would have to go to the location where I opened the account originally to find out.
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    I've never paid over draft fees in my life and I've had many. I just call up telling them that the company assured that the account will be withdrawed on the next day (totally a lie) and it was out of my powers, can you do something about it, please? And they will say OKAY no problem. ;D
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    When I used to live in Canada, banks gave $500 free protection in overdraft charges. So if your balance went down up to -$500 at any time, they will charge you about $5 per month. Now that my friend is what overdraft should be. Read Caspar_s's post above for evidence.

    Here in the US, the banks charge overdraft fees to transfer your own money from savings to checking and they want $10 per such transfer. Plus if you don't have enough cash in the account, they want $35 per transaction for a few days and then $5 a day for extended overdraft.

    How can these people live with themselves? Especially after all the $$$ we help them earn in card usage fees from merchants.

    Government needs to make banks create a type of account where there is $1.00 transaction fee for the merchant regardless of the total amount and disallow any overdraft whatsoever. Reject the transaction. Seriously, how does charging 2-3% of every transaction, even when you purchase thousands of dollars of things make sense? Are they saying that they have to work more for us if we wanted to spend $500 instead of $5? What is their rationale? There is no frekin rationale. It's called GREED and our elected officials allow that because they get heavy campaign contributions.

    We think the developing world has problems, they don't have infrastructure, they don't have money, blah blah blah blah blah. America has just as many problems if not more. It's just that we have different kinds of problems and they're equally paralyzing. We talk about civilized, yet we still take a big bite out of poor people's pocket to become increasingly wealthy while our politicians protect us because they want us to pay them to continue ruling.

    /rant.

    by the way, mods, my post counter is dead.
    Last edited by crypticlineage; 08-27-10 at 01:14 PM.

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    Quote Originally Posted by no1mad View Post
    Been thinking about possibly joining a credit union- this just may push me over the edge.
    +1

    Go for it. I've been with my CU for 6 years and can't be happier. Previously I was with Fifth Third Bank and had to bring legal threats to get them to recant on fees imposed because of an internal error.
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    Quote Originally Posted by crypticlineage View Post
    by the way, mods, my post counter is dead.

    Foo posts do not count. Go post in one of the cycling related areas and check that number.
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    Quote Originally Posted by Imperturbable Ryuu Ichigo View Post
    I once had a bank overdraft my account by $660 . I ended up paying $120 cash to close the acct.

    Even though it was there fault entirely.
    Now is this a true story Itchy of are you just filling the thread?
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    Senior Member tizeye's Avatar
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    Worst I ever heard involving a bank was my manager's experience. After their divorce she short sold the house which was unaffordable on her income. She, the ex and daughter had joint account at same bank as mortgage. After the short sale, the daughter who lived in Thailand, saving and returning to US to go to medical school and converted her savings to US$ with the deposit to the account. The bank took the $15,000. Technically they could - and are intent on keeping it - as that is the way they wrote the (all) checking account agreements. It makes little difference to them that the short sale terms were settled 3 month prior to the deposit, and the bank was agreeing to their level of loss in the short sale.

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    long time visiter Alfster's Avatar
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    Keep in mind that banking is a very competitive market, and they desperately want to keep customers. NEVER just roll over and accept these types of fees. Give them a call and tell them you really like dealing with them as a bank, however you're disappointed in these excessive fees. Tell them you'd be disappointed if you had to shop around for another bank since you've had a relatively good banking relationship with them up till now. If the first person answering the phone is unable to help you, ask for their supervisor. Trust me, it works.

    Most people don't realize that you can negotiate these types of transactions. I posted a thread a while back about phoning up my cable company telling them I'm considering switching to satellite. They quickly offered a significant reduction in my bill. They didn't want to lose me as a customer. Use the power of competition to your advantage.

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    Super Moderator no1mad's Avatar
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    Quote Originally Posted by spry View Post
    Now is this a true story Itchy of are you just filling the thread?
    IIRC, there was a thread about someone's frustration with BOA...

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    Super Moderator no1mad's Avatar
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    Quote Originally Posted by Alfster View Post
    Keep in mind that banking is a very competitive market, and they desperately want to keep customers. NEVER just roll over and accept these types of fees. Give them a call and tell them you really like dealing with them as a bank, however you're disappointed in these excessive fees. Tell them you'd be disappointed if you had to shop around for another bank since you've had a relatively good banking relationship with them up till now. If the first person answering the phone is unable to help you, ask for their supervisor. Trust me, it works.

    Most people don't realize that you can negotiate these types of transactions. I posted a thread a while back about phoning up my cable company telling them I'm considering switching to satellite. They quickly offered a significant reduction in my bill. They didn't want to lose me as a customer. Use the power of competition to your advantage.
    They weren't my primary bank. I had set it up as a way to make purchases online without compromising my primary account # with a much bigger balance. If I had a good experience with them, I was thinking about making them my primary, as my wife already had an account of her own with them.

    But my account with them has been closed- without my knowledge or input from me. Found out about it when I went to close it myself, but still...

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    long time visiter Alfster's Avatar
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    Quote Originally Posted by no1mad View Post
    They weren't my primary bank. I had set it up as a way to make purchases online without compromising my primary account # with a much bigger balance. If I had a good experience with them, I was thinking about making them my primary, as my wife already had an account of her own with them.

    But my account with them has been closed- without my knowledge or input from me. Found out about it when I went to close it myself, but still...
    Doesn't matter, you're a potential long-term customer to them. Give it a try.

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    Look! My Spine! RubenX's Avatar
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    Go bankless and get a prepaid debit card. You can still set up direct deposit to the card, shop online, pay everywhere, etc. When the balance is not enough, the purchase gets declined, simple as that. NO OVERDRAFT FEES ever again.

    PS: credit unions are banks, they will overdraft your ass as good as any.
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    Senior Member tizeye's Avatar
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    Tear up your debit cards. The dirty little secret with them is that you are 100% liable whe the bank has a liability with credit cards. With unauthorized useage, your account can be drained.

    Get a credit card, preferably with cash rewards, and buy everything you would have used the debit card for (other than cash from an ATM). Pay 1 bill each month that effectively represents your debit card spending, taking the credit card to zero. Maximum liability from fraud $50, no interest, no fees, and an improved credit score as cashflow from the credit card useage is reported while the same cashflow from the debit card is not. You also need a dedicated ATM card as it would be considered a cash advance on the credit card with interest charged from day 1.

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    Look! My Spine! RubenX's Avatar
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    Quote Originally Posted by tizeye View Post
    Tear up your debit cards. The dirty little secret with them is that you are 100% liable whe the bank has a liability with credit cards. With unauthorized useage, your account can be drained.

    Get a credit card, preferably with cash rewards, and buy everything you would have used the debit card for (other than cash from an ATM). Pay 1 bill each month that effectively represents your debit card spending, taking the credit card to zero. Maximum liability from fraud $50, no interest, no fees, and an improved credit score as cashflow from the credit card useage is reported while the same cashflow from the debit card is not. You also need a dedicated ATM card as it would be considered a cash advance on the credit card with interest charged from day 1.
    Don't fall for the bank's fear campaign. I would rather have my account being emptied (it is almost empty anyway) and be liable than have the bank itself making my account go negative (negative as in BEYOND EMPTY) every now and then.

    When a bank offers me a NO OVERDRAFT option, I might consider it again.

    As for the credit score, true that the debit card doesn't report anything. But guess what? Because I have NO OVERDRAFT I can actually PAY MY BILLS on time, therefore my creditors won't report any late payments either.
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    Senior Member mikeybikes's Avatar
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    I opted out of my bank's overdraft "protection." They charge something like $35 for every transaction overdrawn.

    So now, my debit card will get declined when there's no money there and checks will bounce like normal.

    Not that big of a deal, I haven't overdrawn an account in ages.
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    Senior Member mikeybikes's Avatar
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    Quote Originally Posted by RubenX View Post
    When a bank offers me a NO OVERDRAFT option, I might consider it again.
    The new legislation requires banks to have you opt in to overdraft on your accounts now.
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    Quote Originally Posted by no1mad View Post
    But my account with them has been closed- without my knowledge or input from me. Found out about it when I went to close it myself, but still...
    If they're BoA, be careful. I've heard so many stories about them, where people were told their accounts were closed (as in, zero-balance, not negative), and then 6 months or so later, they'd get a collection letter because BoA charged them some sort of account dormancy fee or monthly fee, and because there was no money, they got hit with an overdraft, and those just kept rolling. (AOL did something similar to my ex, back in the day - he called them to close the account, but they kept on charging him, which he didn't find out until several months later because he didn't pay close attention to his statements.)

    I guess just get it in writing that your account is closed, if you can. Banks pull some shady sh*t. Instead of making money from loans, many of them are now focused on making money off of fees.

  25. #25
    Look! My Spine! RubenX's Avatar
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    Quote Originally Posted by mikeshoup View Post
    I opted out of my bank's overdraft "protection." They charge something like $35 for every transaction overdrawn.

    So now, my debit card will get declined when there's no money there and checks will bounce like normal.

    Not that big of a deal, I haven't overdrawn an account in ages.
    LOL... let me get this straight. They don't charge the $30 overdraft fee, instead they charge $35 overdraft protection fee per transaction....

    Oh God, If I ever have the money I'll open up a bank myself.
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