I have been talking about this issue for years..the debit card trap.

I am very low income so I use a debit card to pay my bills online and to shop with,it's just much easier.

But the crooks at the bank will approve your transaction if you are short even by a few pennies and ding you for an overdraft fee. A lot of banks charge around $35.00.

I got burned by this a couple of times when I first got my debit card,but since then I have learned to log on and check my balance before I go out and about. I also had to learn that some companies take forever to batch their transactions so I have to keep that in mind.

It should be against the law!
http://www.nytimes.com/2009/08/20/opinion/20thu1.html?_r=1

jeesh... :eyes:

and you are probably the one who still writes checks in the express lane.

why carry a bulky legder with you to track your transactions when all you have to do is tap the CC machine with your visa? Doesn't make sense.

okay that's weird.....anyway, see my post below...Oh, and I haven't written a check for well over a year :)

I was like WTF?

bet she's good at it.

with a snark?

BTW, who knew there were so many people here on DU incapable of an occasional human error?

My husband once overdrew his account when he used his debit card instead of his credit card by accident. I've caught myself nearly making the exact same mistake on several occasions. There is something about having cranky kids with you in the checkout line that can make you lose your thinking power!

Having them all lined up nice and neat in the wallet makes it easy to grab the wrong one.

So much for the "party of peace" bullshit.

:(

“Transaction Sorting” Maximizes Overdraft Fees for Banks

With the new credit card laws about to go into effect, banks are scrambling to replace the usurious income they used to be able to generate through late fees and sudden high interest rates. Overdraft fees on checking accounts are now being referred to in the banking industry as the “motherlode”. The method for maximizing these fees is called “transaction sorting”, a process where banks can clear charges in any order they choose to generate the maximum number of overdrafts.

For instance, lets say you have a $35 balance in your checking account, and pending checks and debit card transactions of $15, $10 and $100. Even if the transaction dates of the $15 and $10 charges precede the $100 check, the bank can choose to clear the $100 check first. Clearing the transactions out of order will result in three overdraft charges instead of one, or $90 versus $30 in fees. In short, the bank took things out of sequence to make more money.

http://www.creditinfocenter.com/wordpress/2009/07/16/transaction-sorting-maximizes-overdraft-fees-for-banks/

Hosed at the gas pump -- by your debit card
You may have topped off with just $20 worth of unleaded, but the debit-card transaction could freeze as much as $75 in your account, sometimes for days.

If you ever use your debit card to pay at the pump, watch out: Did you know that every time you top off the tank, a chunk of your checking account can be blocked -- sometimes for days, with the potential to cause you all sorts of financial headaches and bounced checks?

That's what happened to Jessica Hathaway, a state employee from Allentown, Pa. Earlier this year Hathaway stopped during her commute to fill up her car at Rauch's Mini Mart. She bought $22.29 worth of gas using her debit card.

The next day Hathaway balanced her checkbook using her bank's telephone service -- and something didn't add up. The bank said that she'd made two purchases the previous morning: one for the $22.29 and one for $75.

Trouble is, she'd only bought the gas.

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

I have a regional bank that is a tad more forgiving than say, BoA, but it is still a mess and my tank doesn't even hold $75 dollars worth of gas.... even at $4 a gallon.

As if there was a point when it wasn't? Back in the good old days, when things were pure? Like in the 50's?

And if you were a member of DU in the 50s, then you definitely trumped us all.

and filled with righteous indignation and often lacking in empathy, much like the rest of the world. And I didn't say DU was good and pure in the 50's, I asked if there was a time when DU had been good and pure, like the 50's were good and pure. (sorry, one of my pet peeves is a romanticism of the segregated, McCarthy Era, Cold War 50's as good and pure. Didn't mean to cause you so much confusion.)

if funds are lacking. Especially if funds are lacking. If a debit card is used, it is not that hard to keep a log similar to a check register from checking accounts. Keeps a running total of balance available.

Don't roll your eyes at someone on a limited income who is struggling with the timing of money coming out of a sparse account and then the bank fees that are attached.

Some people, like my mother, find this confusing, especially when the fees and rules continuously change and they find themselves overdrawn. It also occasionally happens to me and I try to stay sort of savvy with financial matters, but it's still confusing.

Jeesh, have some compassion and understanding.

I lived on my own for years on a very tight income. I can cook Raman noodles 30 different ways. Yes, I also bounced a couple checks in those days thinking (It won't clear for 2 days :( ).

After getting behind and defaulting on a student loan I said enough is enough, and got my shit together.

I'll tell you this much. Being poor and paycheck to paycheck is a lot easier if you are not continually behind and paying late charges. My sister is 45 years old and I'm now the younger brother helping her out. (Example: if you need help with your electric bill tell me BEFORE it's due/late! - now I have to pay the late charges as well!)

Oh, and FYI- I manage all my bills with one small text file.... just update the numbers month to month...it's really not that hard once you get started...see below ( some numbers changed of course :) )

Verizon - 128.42 - 08-26 paid
Sprint - 77.67 - 09-01 -
Insurance - 155.05 - 09-17 -
Electric - 188.35 - 08-14 paid
Water - 67.32 - 09-02 -
House - 9999 - 09-01 -
BOA Credit- - 0000 - 09-04 paid
HSBC Credit- - 0000 - 09-14 paid
Car Payment - 373.67 - 09-05 paid

Motorcycle- - 0 - 06-20 Paid in Full
Progressive - 230 - 06-12 PAID for year---


0101010 left -

that was my initial concern and why I criticized your "eyes roll". You have an organized way on your computer to keep track of your bills, but I was thinking of people like my elderly mother who do not own a computer, yet have a checking account with a debit card at a bank which continuously changes fees and rules.

Although I understand quite a bit about finance, I'm terribly unorganized (it's just my nature), but it heartens me to see how simply and easily you keep track of your bills and account balance. I think sometimes I over complicate my bookkeeping and then I avoid it. I like your method!

is. In 9 years I have not paid one cent of any kind to my bank (Chase)...no fees, no charges, no penalties...zero.
It takes 30 seconds to make sure I have enough for the coming day.

Some banks to do not update transactions over the weekends. So when Hess hits you with a fifty dollar "hold" on a three dollar purchase and you only have twenty dollars in your account, you have no way of knowing that you now have insufficient funds. Any additional purchase made over the weekend are now costing you thirty-five bucks per item...

I knew about the 'hold' practice but I thought it was only used for large amounts. The old 'float' on checks is pretty much gone as an option too since (as you certainly know) many merchants just scan them and convert them to instant credits electronically - I have no idea how overdrafts are handled with that system though.
It wasn't my intent to defend banks, only to comment that mine hasn't yet given me any reason to complain.
In my younger days, I did bounce the occasional check which was more embarrassing than expensive.
:-)

But I beleive they still do it for gas purchases. BOA has now lowered their overdraft fees on small purchases to ten dollars. Someone must have pressured them, or maybe they were afraid of more class-action suits.
:)

credit card for a completely unrelated reason a few years ago...they had an insert in the statement where customers could buy certain 'bargains' (this was a 3rd party outfit, IIRC) but the way it was described was vague and borderline fraudulent...the merchandise was crap and ended up costing way more than the advertisement implied. It was my bad for not reading the fine print but when they wouldn't refund my charges I just dropped 'em like a hot potato. Just the other day I got a check from them...for $1.53 "to close account"...it only took 2 years. :D

I've started using Google Documents to keep a running tab on all my spending. This way wherever I am I can log in and update my spreadsheet. I have also vowed to never again use my debit card for small purchases. I now keep cash and only deposit into the bank what I need to pay my bills. The last time I had a bill payment get taken out a day earlier then expected causing 10 little purchases to all bounce. They make sure to take the big thing out first so you get 10 bounce fees of 39 bucks each instead of those ten little purchases first and one bounce fee for the payment that came out a day early. Then 35 bucks for ever 4 days it is over drawn. So this time it will still be a few weeks before I can get out of the hole.

I won't make this mistake again. 41.00 cups of coffee are enough to make me realize that my debit card is better off staying at home. From now on I am using cash for everything.

I run a household "traditionally" 4 kids, three dogs, 2 cats. (a zoo needless to say)

Hubby has military retirement, and his salary.

I've been keeping a text file running and backed up since January 05. Jan 2010 that one gets retired and the new one starts. (Changed the names/amounts of the bills for privacy, as well as income and outgo)

Bills August 09
House xxx PAID
Loan xxx PAID
Water xx 8-27
Electric xxx PAID
Gas xxx PAID
Home Insurance xxx 9-01
CC1 xxx PAID
CC2 xxx PAID
Car xxx PAID
Car Insurance xx PAID
Cable xxx 8-27
Cell Phone xx 8-27

Income - xxxx.xx
Outgo - xxxx.xx
Leaves - xxxx.xx Groceries, sundries, gas etc.

Keeping it in a text file allows you to update as you need and know exactly whats coming in / going out every month. Having it in place also helps tremendously when things get tight. Like they have for us and so many other families.

I get made fun of by DH sometimes, because I reconcile our account about 4 times a week. He stops teasing though when he hears his co-workers talk about NSF fees and being behind on payments.


The only thing I really see that I do differently, is I keep track of anticipated income/outgo each month at the end of my list. The trigger for us was having to go through a bankruptcy in 97, I took over the finances and said "Never again" :)

I switched to a steno pad because I had the habit of wondering if I had paid a given bill, right after I had shut down my computer for the night, or as I was about to walk out the front door. Being somewhat obsessive (I'm a checker, ie I go back and check things like door locks and windows) I couldn't simply pull a Scarlet, so the steno pad gave me instant access.

Let's say a person is living on a fixed income. That person needs to have a debit card. Person goes to Hess and buys a cup off coffee and a snickers bar. $2.50 spent. It's Friday. Person has 17.00 left to last until the next check comes. Person goes home and enjoys the snickers bar while unbeknown to him, Hess has put a $50.00 hold on a $2.50 purchase. The bank treats this as a purchase and now this person has insufficient funds.

The person has no way of knowing this because when he checks his balance on his computer, the balance appears the same. He thinks he has a positive balance. The bank does not show updated information on weekends.
Over the weekend he buys another snickers bar and on Sunday he buys the paper and a ham sandwich.

Monday arrives and he checks his balance and discovers that he now owes the bank $140.00 in bank fees in addition to losing his true positive balance.

That is one scenario.
The other is that the banks will process the more expensive items first, so that if you go negative, all of the other purchases become more profit for the bank. Sometimes a hidden 3.00 fee will put a person of limited income into the IF zone.

It is especially punitive to the elderly and disabled, which is why BOA lost a class action lawsuit in California. (later reversed by a corporatist judge)

This is true of all endeavors.

Sheesh.

If so, for how many people? And does it include sewer and trash?

Compassion? Onn DU?

:rofl:

.... over limits. In the olden days, approvals were given unless the card was lost, stolen, or red flagged. If you went over, you were required to pay the overage in addition to the minimum payment on the legitimate balance. Now, they actually know how much cash or credit you have available at ay given moment and there is no reason for them to approve a charge above limit.

A fifty dollar hold on a 3.00 item can easily convert a positive baalance to a negative one. I know it's hard for an incresing amount of democrats to understand this but many people only have a few dollars at the end of the month.

If you go to Shell, and they put a fifty hold on your ($50 balance) account because you are using pay at the pump to fill up your scooter, but you only buy $3/worth of gasoline, and then you go and use the card at Big Burger which uses the "charge" function for $10, then here's what is supposed to happen. At the end of the night (approximated 4am) the $3 charge from Shell is supposed to go through and cancel the $50 hold, leaving you $47 out of which the $10 at Big Burger will be deducted from your "available balance" because "charges" have to be processed as deposits to the franchise bank before being deducted from your balance. It takes an extra day or two to sort things through Visa (charge function) whereas debit is in real time (but not always).

It should be illegal. The transaction should simply be denied.

so they can charge you $105 for three OD charges on three $10 checks instead of $35 for 1 OD charge on one $30 check.

As soon as you make a transaction, the bank locks the funds down. The balance DOES NOT REFLECT THIS! Some banks DO take it into account online with an "available balance" column. Most do not. The ATMs do not.

Merchants accept the credit from the bank for the purchase but often do not post the transaction for a few days or even weeks. They have batch transaction agreements with the banks.

If you do not keep REALLY tight records of your transactions, you are going to get fucked. A lot of people look at the balance on the ATM receipt and think it means they have that much unspent money. They are wrong. If you see $200 and take out $40 but $170 is stuck in outstanding transactions, you're $10 over and that means a $35 overdraft fee. Some merchants tack on their own fees and I've heard about double-strike transactions where they file for the fee and that leads to another $35 overdraft fee from the bank.

Debit cards are fine if you know your balance is high enough, but don't fuck around with it when you're down to the last few hundred.

and they show everything as pending transaction online before it's cleared....

And when I go to an ATM it DOES show my balance with the pending transaction omitted- BUT I don't trust the ATM. I keep my own records in my memory and use online management....

They roam the streets at night looking for brains to eat. In most red states, they go hungry.

It's the holds for debit purchases that send many unsuspecting people into an overdraft situation and the so-called "overdraft protection" peddled these days is just a mechanism for justifying as many fees as possible.

Overdraft line of credit, an older form of overdraft product, was much cheaper because the fee was based on interest tied to the overdraft amount.

The other, better product was to have a companion savings account linked to the checking account with overdrafts paid first from the savings account, although these days this option is harder to find and some banks have started to charge fees for this service too (I saw one recently where it was $18/month when the service was used.)

I have had this happen once (recently as a matter of fact)

I was in a hurry and I used the wrong debit card for a purchase. As soon as the transaction went through and the clerk handed me the card back, I realized I had used a card on the wrong account and that had just cost myself 34 bucks.

Basically I grabbed the wrong debit card out of my wallet without looking at it.

I am quite savvy in basic finance, thanks--not stupid, not irresponsible.

Everyone occasionally makes mistakes (except for you appparently)

The banks are ripping people off with these tactics -- AS USUAL!

Had an unusual bill like 196.69, and I put in 169.96 and overdrew my account. But I had it coming because I'm not perfect and apparently not rich enough to keep an acceptable cushion.

:eyes:

people need to learn how to read the agreements that they sign...:eyes:

The banks will not let you opt out of this scam.
Just decline the card at point of sale! As it was years ago, before they came up with this BS.
The Times makes that simple point.
If you want it, take it. If not, let the customer opt out.
But then they wouldn't rip off $38 billion in fees from the poorest 10% of cardholders.

Where's my f#cking "consumer choice" they're always babbling about?

because i'm able to do the very simple math it takes to figure out how much money i have in my account at any one time.

but then- i didn't go to public schools, either.

Not on debit bounce.
Surely with your private school education, you realize the difference?

And forget the Excel spreadsheets, accounting ledgers and abacus.

Just pass a law, as the linked NYT editorial demands, allowing bank customers to opt out of debit bounce.

Then I can finally go into my bank and say: "Get that bullsh!t scam off my account!".

Overdraft protection would move the money from savings to checking with a (smaller albeit still outrageous) fee to cover the amount the account is short. Bouncing the check or overdrawing the account then tacking fees on for insufficient funds is a completely different thing.

different banks probably call it different things in different states.

and i hate it when banks refer to the accounts and loans that they offer as "products"- they aren't- they're 'services'.

They should only be used as such. I use debit cards exclusively and I religiously check my checking account online everyday, sometimes multiple times a day, to make sure there are no problems, especially if I'm planning to make a major purchase.

Every card has a toll-free number on the back that you can call if you don't or can't access the account online.

I disagree that it should be against the law for a financial institution to charge an overdraft fee, though. While some companies do take a while to batch transactions, you should still check your account to make sure you have enough funds for the day of the transaction up to a week later (in case the transaction is batched later).

not when they approve a transaction and there isn't cash to cover it.

or- they could just keep track of their purchases, the way that most normal people do.

Debit card "bounce protection" cannot be opted out of.

Overdraft protection and bounce protection are two different things.

And stores take your checks without first checking your balance.

There's a major difference between writing checks and using cash.

If they're used for certain retail purchases like gasoline they act more like credit cards, where the authorization is made before purchase and the amount exceeds the purchase. If one goes by an offline log of transactions rather than an online account, it's easy to spend money that is in the account and still generate overdraft charges because not all of the funds in the account are available until the hold is released.

mostly from people are who already struggling

and there were times with no food in the house that touching that last twenty bucks in the account was very tempting. However, since I never knew what sort of nuisance fees were coming, I never did touch it.

A lot of banks are starting to repay that TARP money on the backs of the poorest depositors with those overdraft fees.

And yes, there needs to be basic finance education. Middle school would be the place to do it. High school kids are already running into trouble these days.

When you write a check for more funds than you have, you pay overdraft fees.


Now..maybe the fees can be lower, but is it really so hard to know your balance before you write a check or use a debit card?

apparently it is for some people- what's really sad is that they don't think that it's THEIR responsibility to do so.

without having to scrawl in a check book every time I buy something. But before I did, I got burned twice. I can now balance down to the penny thanks to online banking.

in regard to the bank's check clearance policy, if the bank will even provide you with it.

They also add the $35 fees on uncollected funds, which could be days after you make the deposit.

I know that requires keeping a running total, but that's how a person avoids bouncing checks and overdraft charges.

I gave up on checks, debit cards, ETF, and every other method to pay directly from checking account got tired of getting burned.

Now I pay everything I can by credit card and those that I can't I pay by billpay.

If I am "short" say $12 at the end of the month then I pay the CC down to $12 and the interest 9.99% on $12 is like $0.10.

$0.10 vs one, two or three overdrafts at $35 each?

I even setup an automatic min payment on the credit card 2 weeks in advance that executes every single month so in case I forget to pay credit card I won't get a late payment fee.

Havent paid a fee in 3 years now. It works for me.

If you are worried about getting approved try gas companies (i.e. shell visa, or exxon mastercard) they tend to have lower limits but pretty much approve anyone (plus most give some discount on gas).

Has nobody ever taught you how to reconcile a bank account?

Here's a hint, the number you get online IS NEVER FUCKING RIGHT unless it's been three BUSINESS DAYS since your last transaction and ther are no pending automatic payments.

:eyes:

Learn how to fucking reconcile. Then reconcile EVERY MORNING and again EVERY EVENING after your day's transactions.

Hell, I'll reconcile multiple times every day if I'm making a lot of transactions.

Damn, with spreadsheets, up to the minute reconciliation is FUCKING EASY! Back in the day, we did it all with pen and paper AND WE LIKED IT!

Now GET OFF MY LAWN!

All charges on credit card except mortgage, insurance, car note, utilities.

End of the month pay off the credit card. Rinse and repeat.
It is good some people can reconcile but I always forget a charge here or there or have a recurring charge that I don't add in.

I believe in accepting reality and my reality is by using a credit card I haven't paid any fees in 3 years. :)

it gets you the same penalties as a DC.

Hint: The poster was being facetious. Trying to show only a reconciling automaton with no life would be perfect with it all the time.

for a small account I have on the side. It really sucks when its 1 and 2 dollar transactions that come with the overdraft fee, so I do feel the OP's pain. The penalty fee should be lower but regardless of what it is, I won't ever slip up like that again!

from these fees, would base their business strategy on a few people who don't reconcile their account?

Where do you people come from?

...not being able to keep track of how much money they have, and spending more than they have in their account.

It's actually brilliant. Unethical yes, somewhat, but definitely f*cking brilliant.

I've not had any fees in YEARS.

And the last time I paid a fee, it was my own damned fault because I gambled on a check not hitting the account ebfore my paycheck hit the account, SO I SUCKED IT UP BECAUSE IT WAS MY OWN DAMNED FAULT!

without the facts. This isn't about people trying to kite checks. This is about predatory posting to rake in overdraft fees.

Wachovia, BofA, Citibank Sued Over 'Bad-Faith' Overdraft Fees

John Pacenti
Daily Business Review
July 27, 2009
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Georgetown University student Melanie Garcia became alarmed last summer when her Wachovia branch in Miami Springs charged her two overdraft fees for covering debit card transactions with insufficient funds in her account.

Garcia then discovered something peculiar about her purchases. At least four transactions were held for three days, and a check with the highest amount was processed first, depleting her account when smaller and earlier transactions could have been processed without a fee.

She ended up being charged $88 for $57.39 in overdraft protection. Outraged by this incident and at least one other, the graduate student decided to sue last September.

"Wachovia routinely enforces a policy whereby charges incurred are posted to consumers' accounts in nonchronological order designed to maximize the number of overdraft fees," the lawsuit claims.

She contends Wachovia's "scheme" abused contract rights and amounted to bad faith.

http://www.law.com/jsp/article.jsp?id=1202432536214&rss=newswire

/spelling

Has for years.

Fact of the matter is, she screwed up. It was her responsibility.

points out the difference between covering costs with these fees and using them as a profit center:

http://wbztv.com/local/bank.fees.congressman.2.1122650.html

"Some consultants offered banks ways to boost overdraft and credit card revenue."

http://www.usatoday.com/money/perfi/credit/2009-07-08-banks-overdraft-fees_N.htm

I can't get home (5 minutes max) fast enough to beat the recorded transaction. Maybe there are some merchants still in existence that use the old mechanical card embossers and turn in paperwork by mail
but not where I live.
:shrug:

Weird...

It may sound like a lot of work but really it's not after a few weeks and it just becomes part of your routine. It has literally saved me hundreds of dollars in fees, where I have ALMOST gone over and realized I needed to wait a day, or had my wife call and I tell her to wait until the next day to stop at Best Buy.

I found a template and altered it to function how I want it to.

I even have a tab for automatic payments.

I have another tab for budget management.

I not only know how much I have at any instant, I know what my expendable income will be on Tuesday three weeks from now if I want to.

They have a spreadsheet function and you can access your spreadsheets from any computer. I started this last week and found it's great to have it in one place I can check from home or the office.

I don't understand how some transactions seem to go through in real time, and others take a couple of days. Thank goodness for direct deposit.

I was pretty careful about not spending down to the limit in that account, but when they started adding undefined "miscellaneous fees" that would ensure that my next check or debit transaction put me into the negative numbers, I decided that I didn't need them anymore. (I only had that account because I thought--erroneously, it turned out--that I could more easily receive remittances from Japan.)

I don't check my balance online a lot because I still use a check register to record all transactions.

What I do is when I make a deposit to checking or transfer from savings to checking, I write down that I transferred/deposited about $25 LESS than I really did.

Then I forget about it.

I do this every time. Sometimes I'll get $300 or more surplus when I check the balance online, at which point I'll spend down to within at least $150 SURPLUS and get something really cool. In effect, it becomes something like a savings account, but without the interest. Which I really don't care about because the loss of interest more than makes up for the possibility of being charged for overdrafts.

But that's my suggestion. If you can't or won't keep track of your balance each day, just make sure you've got a comfortable surplus in your account and then forget the surplus is there. I've been doing this for a few years now and haven't had a problem yet! :)

That way I know I am always within the range and won't overdraw.

I have had zero trouble with overdrafts except when I have done something stupid (like used the wrong debit card off of the wrong account)

I was running a 3 day conference and didn't have time to check my account. The rent check cleared and my SO was two days late putting in his half of the rent. So everything for three days that I used my card for (yes, the card kept working even though I was massively overdrawn) I was charged $28 in over draft fees per transaction. When I finally figured out what had happened, I called my banker and was able to have 3/4 of the fees reversed. This is a local bank so I actually have a relationship with the guy that opened my account. I asked him why I had been able to keep using my card even when there was no money in the account and I got the "overdraft" response. I asked him to remove it from my account. I know it's how they make their money-but c'mon! If there's no money- don't approve the transaction! I got a local phone number from him so I can call for my balance when I'm away from a computer- like at a 3 day conference!

Then they changed the rules and I just recently go whacked with $280 in overdraft fees when my card kept going through for a few minor purchases. Each fee was $35! I've also learned that they now charge a few pennies to use your debit card. It used to be they'd tell you to use your debit so you wouldn't get changed the credit processing fee, but now they whack you with a credit processing fee anyway and say you don't get charged a fee to use the the debit card as a credit card. WFT?!?! I hate fucking banks.

Using a debit card is the same a writing a check. The consumer is responsible for knowing how much money they have available. Write a check for .01 more than you have in your account, it bounces. Same for debit cards. Why do we need a law that will only further enable irresponsibility?

especially how often they can be changed and capping OD fees.

These people are on a rampage, they're being sued all over the country and you're blaming the victims. Amazing, really.

When they post your transaction should be irrelevant. If you have 100 bucks in your account and you make a purchase of 95 bucks, you have 5 bucks left, whether they post it immediately or next week. YOU know you only have 5 bucks left and if you check your account tomorrow and there is still 100 bucks, YOU KNOW it hasnt been taken out yet and that YOU should not think you still have 100 bucks.

If you dont spend more that you have, OD fees are ZERO.

I did books for people for years.

I have not done books for anyone, never taken more than basic finance classes and in 41 years, I have never bounced a check or overdrawn a debit card. Why? Because I dont spend more than I have. Am I special? Am I unique? Am I better than everyone else? No, No and No! Personal responsibility is all I am preaching here.
Sure, banks have taken advantage of stupid consumers and it is wrong, but if consumers were more responsible, we may not have these problems.

that these banks are using predatory practices to force overdrafts. Unless you have some special super power, you have no control over what the bank does. That's why I was laughing. And that is why they are being sued all over the place.

No one is arguing against personal responsibility. That isn't the issue.

But I still fail to see how a bank can force an overdraft. If one does not spend more than they have, how can they overdraw?

for one thing. Your Friday afternoon deposit doesn't post until Monday even though it does show pending on your account and is added to your balance. It looks exactly the way did before when the bank did post it on Friday but this time the bank says, it didn't post until Monday so all your OD fees are belong to us. Small changes like that trip people up who are doing their best to be diligent and they always favor the bank.

The other element is re-ordering your transactions, from biggest to smallest. That way if you do go over a buck, they can charge you for two ten dollar checks instead of one 20 dollar check and they make twice the fees.

If you dare to use it, people will call you nasty names. I am not kidding.

you can change the behavior of others. We call that "magicial thinking".

Haven't you ever heard their "I'm not perfect, just forgiven" drivel? Way too many Democrats use the same rationale, they just call it something else.

as children do when they think they caused their parents to appear because they wished it, for example. And claiming that Democrats attempt to absolve themselves of personal responsibility is a right wing meme.

because a LOT of folks here cleave to that meme. If you sincerely believe that many DUers do not find the concept of personal responsibility anathema to Democratic values, you are reading threads I never seem able to find. :shrug:

In any case, your definition of 'magical thinking' really has nothing to do with the issue. Sorry.

bank practices by being responsible is like a child believing his parents will stay together if he is good.

And I have been at DU since 2004. I've seen no indication whatsoever that this board rejects personal responsibility as a value. On the contrary, I've seen posters to this board step up for each other, time and again.

I certainly have no objection to helping out someone...I've spent much of my life doing precisely that, but I find it beyond incredible that you haven't seen hundreds of posts attributing the concept of personal responsibility to a Republican/racist/rightwing/freeper mindset. I almost think you're just pulling my leg here but I can poke around and find plenty evidence if you really are serious. The usual 'rationale' is that 'personal responsibility' is mutually exclusive to compassion, which of course is a concept the rightwingers unsuccessfully attempted to co-opt.

Republicans use the "personal responsiblity" line as a cover for contributing nothing to the community they themselves depend on. It's just part of their Orwellian bs.

the republicans to frame my argument. :D

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that allows people to opt out of debit card "bounce protection".
Just let the consumer opt out and have the sale declined at point of purchase.
Simple, and yet for some odd reason the banks are adamantly against allowing this consumer choice.

But I still think that consumers should bear the most responsibility for keeping track of their finances.

that can be used for "overdraft protection" of up to $100. No charge for this service if I ever inadvertently overspend what's in my checking account. I don't use the credit card for anything else and it will cover whether the overdraft is from my debit card, check or automatic payment.

Fortunately, I've only needed it to kick in once. But it's nice knowing that I have that $100 cushion.

There is something disturbing about that, especially when the person is driving a car up to the ATM. Wouldn't you think they would check the balance on paper, on the phone, or online BEFORE leaving the house?

People joke about it, but there is an ATM mentality, ie people who in essence "ask the ATM" if it will give them money, like a magic eight ball. Literally sometimes.

But if you can check your balance at the ATM, then why can't you check it at walmart? Surely the technology is in place, after all, you can get cash from your atm card at walmart and I'm willing to bet it doesn't give it out without checking the balance.

And even if people are irresponsible or dimwitted or any other nasty word we could apply- exactly how does $35 equal the inconvenience to the issuing bank? It's not like a real person takes note of your overdraft and gives you a call.

It's a scam. That is what you call it when you charge people something for nothing. A scam. It's a bigger scam than hot rock therapy.

If in doubt or running low, take cash out at the ATM and spend that, double check any automatic monthly payments, and most important of all WRITE to your bank (via email is fine) requesting that they do not make any 'courtesy payments' or give you 'courtesy overdraft protection' or the like, that might result in you being charged a fee for going a few pennies into the red. You might have to repeat your request a few times.

http://www.pueblo.gsa.gov/cic_text/money/protect_overdraft/bounce.htm

I know all about being super-broke and having a single-digit account balance. And I know that it's hard to get on without plastic these days - in fact, it's stupid to try, because you can often save serious amounts of money by buying things online instead of in a store. It's ultimately up to the account holder to exercise caution every time they use their card, just as you would with a check.

One simple and inexpensive thing which can help is to have the savings account linked to your checking account. When you buy something online and you save $10, put $5 in the savings account. The minimum balance to avoid fees on a savings account is usually way less than for checking, or you may be able to avoid the fees by making a small monthly transfer from checking to savings. You can save serious money online, so when you do you, treat some or all of the savings as savings.

My bank has shuffled around dates and times of deposits and withdrawals to make sure I've been charged before. Just happened last week as a matter of fact. I wrote a check for school supplies Thursday night, knowing it couldn't get to the stores bank and mine before my direct deposit went in Friday morning. Well my bank managed to get 38 bucks out of me for that check, not sure how but when I checked my balance there was a charge. Called the bank and they very nicely told me.. too bad. Lovely bank deregulations we have.

1. you wrote a check when you didn't have money in the account. This was foolish, because for all you know checks can be deposited by someone an hour after you write them, and many ATMs are able to read checks automatically and debit your bank. So if you were relying on the check sitting in a night safe and the amount not being keyed into a computer until after the direct deposit the following day, don't. I know, I know, the bank usually sits on your incoming checks for several days and makes money that way, but you basically have to assume that the check or debit is effective the minute* you issue it, and if you don't have the money in your checking account you're asking for trouble.

* You do know, right, that even before these fancy ATMS and so on, a merchant could call your bank after you left the store and ask them to verify that you were good for the amount on the check?

2. Never, ever call the bank. Do it in writing, because that way you have a written record of the conversation. If they promise you something then you have a written record of it. If they give you an explanation that turns out to be false, misleading or incorrect, then you have a written record of it (this can help you get a fee reversed). If you ask for guidance on what the banks policy is about checks for $28.07 written on Tuesdays after a full moon, then you have a written record of what they tell you, and can hold them to it. Phone conversations are a complete and total waste of your time unless you wire your phone up to a tape recorder, which may or may not be legal in your state. OK, it wastes the bank's time too, which is emotionally satisfying, but is much less likely to get you your money back.

3. you are not sure how? Well get back in touch with them (by writing, not calling) and ask them to explain it in detail until you know exactly how it did happen. Based on what you said, my guess it the check did get deposited by the business you wrote it to the night before your pay was deposited, which means your probably are at fault and are thus SOL this time. But the best way to avoid getting caught out by such situations is to become familiar with exactly how the procedure works, check your balance frequently, and avoid making assumptions about when transactions will come in.

I think these $35 and $38 fees are way excessive...but they are also easy to avoid.

Date of the check.

They can go back and post the check the date that is written on the check.

All banks have this right.

I had no idea -- I pay bills the old-fashioned way, with checks in the mail. I always sit down two days before payday and write them out, then mail the out-of-town bills the day before payday. It never occurred to me that dating a check August 30 could get me into overdraft trouble if it wouldn't arrive in Delaware or wherever until Sept. 1. I grew up with "do-not-postdate-checks" pounded into my head, but from now on they're gonna be dated on payday (or should it be the day after payday?).

for three days after payday.

or just saying "can't beat the system", I'll bet if _every_ time someone had a cascade of overdraft fees, they'd take in a group of 3 or 4 people--including some "tough looking" guys--to talk to the bank manager, and very nicely ask for SOME of the fees to be restored to their account, it'd work. Not for the people who chronically overdraw thru inattention, but for the longtime customer who gets clobbered once a year or less for a piddling amount.

They wouldn't want to have to waste their time arguing with you, for one thing. Plus (like other businesses) they never know but what you're the one customer who'll take your complaint to the limit, resulting in court appearances etc. which are big time O& money wasters.

It's just a thought.

you to learn basic math and balance your account but it is easy to be off by small amounts.

My credit union will not ding you if you use your debit card and are a few cents (or a good number of dollars actually) short. Not even an overdraft fee. Checks on the other hand are dinged up to a negative $400 balance then they are rejected.

There is a reason why I now call my bank "Walkalloverya".

I'd think the best solution is the transaction would not go through. I remember arguing this with BOA once - they told me "it was a courtesy, to avoid embarrassment." I told them I didn't care wasn't 'embarrassed' by a lack of funds and asked them to not 'do me the favor' - to no avail.

That aside, if my balance is low enough that overdrawing might be a problem, I take cash out and use it as much as possible. And pay all my bills first thing when I get paid so I know how much I have until next payday.

Enough so that I don't even come close to bouncing a check.

But as advice that wouldn't work for someone who is working poor and broke all the time.

I remember the days of living off of $17K a year with a car payment and apartment rental. I didn't bounce checks because I maintained my check register to the penny. Anal, sure, but it worked.

any little extra expense really screws them up.

most people who get hit with overdraft fees with any frequency who actually consider the $35 hit to be significant are basically POOR.

last time i checked poor people needed things just like i do, they need to eat, have shelter, work and so forth, but unlike me, a mental note to keep $3000 in their account because their $2000 mortgage check goes out at the end of the month just doesn't have the same effect it does on me.

IMO, if someone can't balance a checkbook then they should only use an ATM card or sign up for overdraft protection.

My overdraft protection is a small $1000 credit line that is interest free if I pay it off before the end of the month. It's something small like $25/yr and pays for itself the first time you use it. Almost stupid not to have it, really.

i mean that should be pretty clear from what i posted.

my point WAS NOT about how to not bounce checks (by keeping lots of money in one's account).

my post was about how this advice doesn't work for someone who is continually broke because they make crap wages and basically can't live on what they earn.

got it?

:rant:

cant afford thier lifestyle... Gotcha.

Now connect the dots for me and tell me how that is related to balancing checkbooks or an overdraft problem?
I don't care if you're like steven hawking with numbers... if you spend more than you make you CAN'T balance a checkbook.

i need to know this to decide if this discussion is worth continuing.

:hi:

:rofl:

you may be right. :hi:

an ATM card is directly linked to your checking account.. try to use it for 11.27, and you have 11.24, and it will be denied.

or if the store's equipment is "offline", you cannot use it.

the debit card is a "step up"...it allows people to use the card as an ATM, but it ALSO allows merchants to use it as a "CREDIT CARD PURCHASE", which means that if their system is down or offline, you can still make your purchase, but it WILL be processed as an electronic check, and if it arrives at your bank when your funds are lower than needed, you WILL "bounce" it. The merchant's already been paid, so of course the bank is going to charge YOU.

It's no different than running around writing $200 worth of checks on an account that has $100 in it..

Debit cards are wonderful, IF you can keep track of your spending, and have a cushion built in, in case you cut it close.

I wouldn't trust only that -- are you reconciling what the bank says against your own personal records? Have you considered using the debit card for only online purchases, and relying on cash for other purchases? Others have recommended setting up an Excel spreadsheet budget (or something similar). I'll echo that suggestion.

It shouldn't be against the law -- if you don't have the money in your account, you are the one at fault. It's pretty basic, boring banking. I do think the penalties are ridiculously expensive, and that needs to be addressed.

(No, I don't work for a bank, I'm just an American who sees with each passing day that common sense seems to be dead in this country.)

I've had my checking acct info stolen once and it was not fun. I always use a credit card because at least if someone gets that it's easier to get cleared up and my checking acct won't get wiped out.

I then transfer the money from the checking acct to pay the credit card.

I know this isn't the point of your post, but using a debit card online creeps me out :scared:

Really, if anyone overspends their account, it's their own fault. Check ledgers are free at the bank. Takes no time to record how much you spend each time.

but your kid needs to eat, then what?

your check register says...the kid doesn't eat? but oh goody, my checkbook is balanced!

all this advice is so Bourgeoisie.

i'm waiting for someone to say, "well, of course she can feed her kid if she doesn't have enough money, just let him eat cake." :eyes:

I have plenty of experience of being that poor that there is literally no money left in the checking account, and going to bed with an empty stomach. Getting hit with a $35 fee in that situation is only going to make the problem worse - it might tide one over with a few days' groceries or something, but it's $35 less you have available the next time funds are running low. doing this once a month is >$400 a year in wasted fees.

If you don't spend the money, the bank can't hit you with a fee. And maybe next month your balance only goes to $20 instead of -$10. Racking up an avoidable $35 fee in the name of necessity is not responsible, unless it is a truly life-or-death situation.

The banks should just give you money because you are broke? That's the social service departments job, not the bank.

Didn't work that way for my parents or their folks, but I guess now it's different. When I was poor yet never overdrawn, it was because I budgeted and planned, and kept a damn ledger of my expenditures, but that's asking too much.

I'm on SSDisability. I know how to budget, and how to keep track of what I've spent, and how much I need for the 12 meds I take daily. But thanks for asking.

:eyes:

:rofl:

They are like the fucking mafia.

I got dinged a few times in the past, sometimes (not always) the person would remove the penalty fee for me.

to honor any transaction. Otherwise, you're they're personal cash machine.