Posted on 09/09/2009 10:21:54 AM PDT by BGHater
When Peter Means returned to graduate school after a career as a civil servant, he turned to a debit card to help him spend his money more carefully.
So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward. He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee. All told, he owed $238 in extra charges for just a day’s worth of activity.
Mr. Means, who is 59 and lives in Colorado, figured employees at his bank, Wells Fargo, would show some mercy since each purchase was less than $12. In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear. But they would not budge.
Banks and credit unions have long pitched debit cards as a convenient and prudent way to buy. But a growing number are now allowing consumers to exceed their balances — for a price.
Banks market it as overdraft protection, and the fees it generates have become an important source of income for the banking industry at a time of big losses in other operations. This year alone, banks are expected to bring in $27 billion by covering overdrafts on checking accounts, typically on debit card purchases or checks that exceed a customer’s balance.
In fact, banks now make more covering overdrafts than they do on penalty fees from credit cards.
(Excerpt) Read more at nytimes.com ...
This is no different than a bounced check fee.
You really don’t even need to balance it to avoid the fees. Most banks allow you to link a savings account or credit card to a checking account that deducts from there if you go over.
I have had a problem with my debit card (credit cards too) and I am wondering if others have also.
I have stayed at a hotel for several days-the hotel charges my card every day-preauthorizations to be exact-in some cases the preauthorizations are 50% more than the actual charges. I go to check out and POW my card is rejected because I don’t have sufficient funds to pay the bill. I do of course more than enough but the preauthorizations have tied my card up.
One time I paid a bill with another card, one time with cash and my primary card was still tied up for several days with these preauthorizations even though I paid my bill at check out. The hotel says it’s the bank’s fault and you guessed it I call the bank and they tell me it is the hotel’s fault.
Absolutely. But why do that when the government can “help”?
Stupid people like this need to get charged!
Banks should double the charges until people smarten up!
Didn't work.
“it’s time the government looked at abuses here.”
That’s not an abuse, they don’t charge enough for stupidity!
BOA is famous for late posting, I stopped doing business with them a few years ago. When I retired I had to move a bunch of cash from my retirement accounts, choice BOA or a Canadian Bank, in my area, O Canada.
So you feel the charges should just be denied? Or that a bank employee should sit there and read the agreement to every person? Or that the bank should play “mommy” and just not notice??? When people used checking accounts there was always a fee for overdrawing an account... What would your regulation say?
They also offer a wonderful several-day clearance for deposits.
Finances and how to mnage them or just simply understand the basics should be required for obtaining a high school diploma. it is getting better but still a long way to go.
Years ago in the Air Force I had a young troop that worked for me that got into trouble for bad checks. he truly believewd that as long as he had checks to write then it was perfectly ok and expected by his bank for him to just keep writing them.
You cant regulate against this kind of stupid. I would be happy if most kids would leave school understanding the miracle of compound interest and using it to your benefit over a life time instead of it being an albatross for a lifetime.
I have none of these problem because:
1- I keep track of my balance.
2- I belong to a local Credit Union which has a very adequate overdraft protection if I do screw up.
BofA, Wells Fargo, Zion Bank.... they can all KMA.
Make a budget at the beginning of the month, spending every dollar on paper and then stick to that budget. It is actually pretty simple to make your money work for you instead of working for your money.
I’m just glad that I finally beat Hoosier to a thread! ;-)
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No, it isn’t. And I’ve gotten them, and honestly, I deserved them, no argument. But the caution from this article is a good one—remember that the bank isn’t necessarily going to post the transactions in the order that you actually executed them, they’re going to post them in the order that *they* want to, for whatever reason(s).
}:-)4
BOA has that policy.. My wife deposited her paycheck into our checking account and they only allowed certain amount of her check to go through while the other amount waits 14 days to clear.. Even though her paycheck never bounced..
Let’s just stay out of more regulation on banking - people that a subjected to high fees are stupid, at least after the first time - all normal banking fees are reasonable, it’s when exception handling comes into play that banks charge what appear to be high fees but in reality they represent higher costs.
Please don’t encourage more government in the business world.
Yep - he wanted a free "loan" - guess he's more "special" than the rest of us. Reminds me of those people who park in front of the bank doors rather than in a parking space. Yeah, the rest of us are too stupid to figure out that walking from a parking spot takes extra time and effort...
Journalists think they're "special" and deserve more - it's reflected in their politics too...
No.
In addition, a deposit from a few days earlier would have covered everything had it not taken days to clear.
Why does money come out of your account instantaneously, while deposits can take days to clear? It's all electronic nowadays.
Banks do re-arrange the order of thing to ty to screw you over. It's dishonest.
Yes it is. Unlike check clearance, a debit card transaction takes place in real time. The bank's computer is in possession of all the relevant facts. If funds are insufficient, it can simply decline the transaction. Same amount of processing and same cost as handling an accepted transaction.
Ha ha! I saw it but I hadn’t had a chance to ping you to it.
We rarely use our debit cards anymore...mainly for putting gas in the cars. In 19 months on Dave’s plan, we’ve not overdrawn once. The budget is the key to all of it :)
BTW, we’ve had a few setbacks (Murphy came to visit this summer), but we’re still working on step 2 as fast as we can. That third kid in Catholic school puts a little more strain on the budget, but we’re making it, so we can’t complain too much.
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