PDA

View Full Version : are bank overdraft fees logical?



savafan
04-15-2005, 05:29 PM
I could have also titled this "Why I hate Bank One".


I'm just curious, but does it make any sense for banks to charge you [B]MORE[\B] money when you already don't have enough in your account?

For example, apparently I went over the limit of what was in my checking account by using my bank card as a credit card, but I really needed to eat lunch one day last week. So, I pull through a McDonald's drive thru and order two filet-o-fish sandwiches, and a large milkshake. The total comes to $6.59. However, my bank sees fit to charge me an extra $180 for having insufficient funds, so my two fish sandwiches and milkshake end up costing me $186.59. I also needed gas to get to work that day, so I put $15 worth in my tank, which actually ended up costing me $75, once again for insufficient funds. And, does it really make sense for a bank to charge you for using their ATM when you are an account holder at their bank? I mean, should you have to pay $1.50 for using their ATM anytime you want to withdraw money from their bank where your account is at? Not only that, but does it make any sense at all for them to charge you $1.50 for doing a balance inquiry on your account at their ATM? GRRRRRRR......


Okay, thanks for letting me rant. I really do feel better now.

TRF
04-15-2005, 05:41 PM
preach it. It's not like we get to charge them for using our money.

and they do ya know.

i despise banks.

RBA
04-15-2005, 06:15 PM
You need to get a bank that provides overdraft protection for their customers. Or you can try a credit union and a lot them have that.

Some will pull from your savings account before giving you the overdraft loan.

Jaycint
04-15-2005, 06:18 PM
Wow that seems like a ridiculously high overdraft fee. The couple of times that I have gone over they hit me up for like 25.00. I use US Bank for what it's worth. Only time they hit me up for an ATM fee is if I use a non-US Bank ATM though, never heard of a bank charging for using their own ATM.

Reds4Life
04-15-2005, 06:25 PM
preach it. It's not like we get to charge them for using our money.

and they do ya know.

i despise banks.

You get paid for the banks use of your money, it's called interest.

reds1869
04-15-2005, 06:26 PM
US Bank is excellent. They have actually reversed overdraft fees for me simply becaus I asked and have been with them a while. Bank One, however, is Satan...they raised my credit card interest rate by TEN points "just because." Yes, that was their actual explanation!

Jaycint
04-15-2005, 06:30 PM
US Bank is excellent.


I'm really happy with them as well, and this is coming from someone that is pretty picky about their banking.

RosieRed
04-15-2005, 06:53 PM
US Bank is excellent. They have actually reversed overdraft fees for me simply becaus I asked and have been with them a while. Bank One, however, is Satan...they raised my credit card interest rate by TEN points "just because." Yes, that was their actual explanation!

US Bank has also done the same for me.

TRF
04-15-2005, 07:18 PM
You get paid for the banks use of your money, it's called interest.

i don't get interest on my checking account, so no, i don't.

Ravenlord
04-15-2005, 07:40 PM
my bank won't let use a card if it'll take you to a negative number. as well, if you have automatic end of month billing that takes you negative, the overdraft fee is $10.

Reds4Life
04-15-2005, 07:48 PM
i don't get interest on my checking account, so no, i don't.

That's because the bank isn't lending out the money in your checking account. Commercial checking accounts are considered time deposits, a liability on the banks balance sheet. Liabilities don't "make money" for the bank. Savings deposits, on the other hand, are assets. Assets can be lent out, thus you get paid interest for the use of your money.

DoogMinAmo
04-15-2005, 10:25 PM
Bank of America once charged me 35 bucls for overdrafting $0.69 yeah, that's right, 69 cents cost me 35 bucks. you would figure at some point there would be some sort of leniency. Like maybe an overdraft of up to ten bucks is covered for 48 hours, and then you get charged. I supposed this is what overdraft insurance is, but to me it is common sense.

LawFive
04-15-2005, 11:06 PM
Not to pick on anyone specifically, but where is the personal responsibility in all this? If you don't have it, don't spend it.

KronoRed
04-15-2005, 11:10 PM
Not to pick on anyone specifically, but where is the personal responsibility in all this? If you don't have it, don't spend it.
I don't know about savafan but sometimes it's the bank and strange stuff that causes overdrafts

Example at my old bank one time I used my debit card to pay some bills online and do a few other things, these show up as holds, fine..BUT..then they cleared but still showed as holds, basically meaning everything was taking off the available amount twice, throwing the account into - and getting an overdraft fee..it was a random thing, but it was not me or my wifes doing that caused it.

Overdraft insurance, good to have

RosieRed
04-15-2005, 11:39 PM
Savings deposits, on the other hand, are assets. Assets can be lent out, thus you get paid interest for the use of your money.

I don't get interest on my savings. Wait, maybe I do. If I do, it's like twenty-five cents a month. Of course, I don't have a whole lotta money in there. :)

StillFunkyB
04-16-2005, 02:45 AM
I had US Bank. They were teh suck.

When I moved here I had to open a new account since there is no US Bank branches here. I opened an account at a credit union. The lady that was helping me open an account said that she used to work at one of those "major" banks, and that the bank manager used to get on the employees about bringing in "fee revenue". That made me furious. The other thing is alot of banks have the idea that "overdraft" protection is paying any charge to your account no matter what, then charging you fees up the wazoo.

My current bank will withdraw from my savings before taking my account negative, at no charge. If I do overdraft, its a 20 dollar charge, and there is no daily negative balance fee. US Bank charges 35 dollars for overdraft, then 5 dollars a day negative balance fee after 5 days.

One other thing about banks, since I'm on the subject here. The check 21 thing is a double standard. If you write a check, they take your money right away. If you try to cash, or deposit a check it has to clear first. That makes absolutely no sense. Gone are the days of floating checks. I have done this on occasion, and there are millions of people that do so on a regular basis. It's just another way for the bank to generate more "fee revenue".

I hate banks.

919191
04-16-2005, 02:57 AM
I hate banks.


My ex-dad-in-law hated banks. So much that after keeping enough cash from his pay, he invested the rest in guns. He walked around with a briefcase full of weapons all the time (and a blood system full of Pabst!)- he never did cause any trouble, though.

919191
04-16-2005, 03:00 AM
Months ago, I used my debit card and it never did show up on my statement. It was over a 100 bucks. I just left my book that way instead of adding it back n. This is my overdraft protection.

RosieRed
04-16-2005, 05:14 PM
One other thing about banks, since I'm on the subject here. The check 21 thing is a double standard. If you write a check, they take your money right away. If you try to cash, or deposit a check it has to clear first. That makes absolutely no sense. Gone are the days of floating checks. I have done this on occasion, and there are millions of people that do so on a regular basis. It's just another way for the bank to generate more "fee revenue".

I hate banks.

I don't get the check 21 thing either. My paycheck takes days to be "available" to me, but my checks are cashed instantly? Whatever!

ws1990reds
04-17-2005, 01:44 AM
You get paid for the banks use of your money, it's called interest.

And that pay isn't even equal to the rate of inflation. Worthless.

ws1990reds
04-17-2005, 01:50 AM
I had US Bank. They were teh suck.

When I moved here I had to open a new account since there is no US Bank branches here. I opened an account at a credit union. The lady that was helping me open an account said that she used to work at one of those "major" banks, and that the bank manager used to get on the employees about bringing in "fee revenue". That made me furious. The other thing is alot of banks have the idea that "overdraft" protection is paying any charge to your account no matter what, then charging you fees up the wazoo.

My current bank will withdraw from my savings before taking my account negative, at no charge. If I do overdraft, its a 20 dollar charge, and there is no daily negative balance fee. US Bank charges 35 dollars for overdraft, then 5 dollars a day negative balance fee after 5 days.

One other thing about banks, since I'm on the subject here. The check 21 thing is a double standard. If you write a check, they take your money right away. If you try to cash, or deposit a check it has to clear first. That makes absolutely no sense. Gone are the days of floating checks. I have done this on occasion, and there are millions of people that do so on a regular basis. It's just another way for the bank to generate more "fee revenue".

I hate banks.

I'm going to have to disagree with you here. If you write a check, they take your money because it's at the bank you're writing the check from. They KNOW how much money you have. If you try to deposit or cash a check (which obviously isn't from your own bank), for their own sake they MUST check everything out first. You could just as well be walking in with a $10,000 check from someone that never had that kind of money, and be walking away with $10,000 that isn't your's, if they don't check. If the money isn't coming from their system, it only makes sense that they verify that another system actually has the money. That's the price we pay for thievery. :rolleyes:

savafan
04-18-2005, 06:27 AM
Not to pick on anyone specifically, but where is the personal responsibility in all this? If you don't have it, don't spend it.

I'm not denying that I am somewhat personally responsible for the situation, but I still don't like it.

Roy Tucker
04-18-2005, 09:10 AM
Back in the earlier days of our marriage, Mrs. Tucker wrote a bunch of checks and failed to enter them in the checkbook. Roy then paid bills assuming the balance was X when it was X-a bunch. Checks started bouncing like flubber.

When I found out what was going on (after my wife scraped me off the ceiling), I called the bank and explained the situation to them. They were accomodating and agreed to remove the overdraft (I had moved $$$ from savings to checking to cover the checks in the interim). Needless to say, Mrs. Tucker hasn't made that mistake again.

We do have the overdraft protection where overdrafts go to a high interest credit card (supplied for free from the bank). We've never used it and, by God, never will if I can help it. I'll be damned if I'll pay 18% interest.

I also carry a buffer in the checking account. No interest, but then, the buffer isn't that big ($250) and the checking account is free.

I'd also highly recommend getting a bank account that doesn't charge for ATM transactions at their own bank ATMs. That is highway robbery.

REDREAD
04-19-2005, 11:16 AM
As Roy suggested, it doesn't hurt to try to call the bank and ask them to remove the fees. If they don't budge, say that you've been a long time customer and if they don't remove the fees, you're closing all your accounts and Bank One/Chase credit cards. That often works (provided you don't overdraft every week :) )

See, these overdraft fees are a big source of revenue, BUT I can specifically say that this bank is also under a lot of pressure not to lose accounts. Use that as your leverage. It should work, but you're kind of at the mercy of whoever answers the phone. Of course, if it doesn't work, you can always call another branch :)

gonelong
04-19-2005, 11:30 AM
US Bank is the only bank I can stomach.

One of the guys I work with has told me his former company wrote bank software. One of the guys told him that the program they wrote maximizes your overdraft fees by cashing all checks received in the order of highest $$ to lowest allowing more of the lower $$ checks to bounce, and thus more fees.

I had the pleasure of seeing one guy steaming mad at one of my former banks. He had used his debit card to purchase something, lets say at $200. He had $300 in his account. The $200 is then put on hold, leaving $100 in his account. He then spends $105 putting him negative. They not only charged him for the $105 overdraft, they charged him for overdraft on the $200 on hold because they automatically take out the $25 or whatever they charged.

His argument was if you already have it on hold, how can you charge for overdraft, you have already "reserved" the money! They wouldn't give him his money back, and when he got irate they threatened to call the authorities on him.

I called the manager over and notified him that I would be closing all my accounts today. He asked why and I pointed to the guy with the steam coming out of his ears.

The lady behind me sort of grinned and said, "me too, close mine out too".

The manager tried to backtrack a bit, but I closed all my accounts with them and so did the lady. I don't think the guy ever got his overdraft overturned.

GL

traderumor
04-19-2005, 02:09 PM
Overdraft fees are very frustrating and I have been cash poor and tried to float a few transactions. They are excessive to make it hurt so folks won't use their checking for a cheap loan, but then it seems only fair to allow a few freebies a year for folks that for one reason or another overdraw their account.

BTW, banks now fee you to death because of deregulation. The fat days of large interest rate spreads (difference between lending rate vs. savings rate) ended with competition, so now they fee the consumer to death to pay the bills----and keep the executives fat and happy.

savafan
04-21-2005, 08:33 PM
well, after depositing $659 into my account last Friday, they then hit me that night with another insufficient funds fee of $60 after my deposit had already posted to my account. On top of that, they charged me $4.95 for online bill payment, a service which I've never used. I've put them on notice that I plan to switch banks.

Unassisted
04-21-2005, 09:57 PM
Blame the de facto deregulation of the banking industry, which allows banks to gouge, soak and squeeze customers in any way they see fit. It does pay to shop around. Surely, you can find a better deal.

BTW, stocks in the banks with the highest fees tend to be a good investment. I own some shares of Bank of America, which are doing very well since I bought them. I would never dream of banking there, though. 'Tis better to be on the profitable side of that 8-ball. :)

SteelSD
04-22-2005, 01:31 AM
sava, I had a similar scenario a few years back when I was in college. I made math mistake with my checking account ledger and ended up overdrafted by about $2.00 (that's it). The bank I was with charged me $25.00 for the overdraft. The next day, they represented it again and charged me another $25.00 for a "representment" fee. The day after that, they returned the check to the merchant and charged me a $30.00 "returned check fee". Then, because it was Friday (I swear to God that was the reason), they charged me another $20 for my account being overdrawn even though I had deposited far more funds than needed to bring my account positive. I then went to the merchant, who told me that I had to go to the credit bureau, where I got charged $35.00 for their own returned check fee.

So, for a $2.00 overdraft, I ended up paying $135.00 in associated fees.

But the kicker was when I went to the bank and asked them about the "representment" and "returned check" fees they charged. I swear that this was the conversation:

Me: "Excuse me, but I made a mistake with my account ledger and it appears that you've charged me $100.00- including two overdraft fees, a returned check fee, and a "Friday" overdraft fee. I don't think that's fair for a $2.00 mistake, particularly since I deposited funds to bring my account positive before your 3:00 post time on Friday."

Them: "Lemme see...yep...that's correct. Your check was presented for payment twice- once by the merchant and once by us and your account was overdrawn both times."

Me: "Sure it was and you could see that before re-presenting the check by just pulling my account up. But the first presentment is what overdrew the account. Why am I being charged a second fee for a presentment of the same check that overdrew my account in the first place."

Them: "Well, we check to see if there's money in the account one more time before we return any check."

Me: "That's not what I asked. I asked you to explain how the very check that first overdrew my account is generating a second overdraft fee after it had already been presented."

Them: "Well, the second fee isn't an overdraft fee. It's a 're-presentment fee'.

Me: "Oh, so if you know an account is overdrawn, then you present the check the very next day before 3:00 PM which is my deadline to deposit funds to the account?"

Them: "Our system re-presents the check when it's scheduled to be re-presented."

Me: "That's not what I asked. I asked you why the check was re-presented before I had an opportunity to deposit funds into the account."

Them: "Well, you could have deposited funds into that account any time before we re-presented the check."

Me: "How am I supposed to know when that check was scheduled for re-presentment. I deposited funds before 3:00 PM on the day of re-presentment to more than cover the overdraft and the first overdraft fee, yet you still charged me a re-presentment fee and then returned a $2.00 check."

Them: "Well, sir <said with the tone of 'Well, jerk...'>, it's your responsibility to have enough funds in the account to cover all check presentments."

Me: "I know this. And I'm willing to pay for the first fee because it was my mistake. However, you've charged me $75.00 in additional fees that were caused by your own actions."

Them: "Those fees were caused by you not having money in the account."

Me: "I deposited money in the account before your scheduled post time. I don't see where that's an issue. But you returned the check anyway."

Them: "It's not our bank policy to cover any NSF checks."

Me: "Waitaminit! You just told me that it's not your policy to cover NSF checks. So why didn't you just return the check after it's initial presentment and save me an additional $45.00 in fees?"

Them: "Well...umm...it's our policy to give you the benefit of the doubt that the funds to cover the check will be there when we re-present the check."

Me: "THE FUNDS WERE THERE TO COVER THE CHECK!! And if you were really worried about giving your customers the 'benefit of the doubt' you'd cover a freakin' $2.00 overdraft instead of charging them an additional $75.00 in fees!"

Them: "Sir...you need to settle down..."

Me: "And you need to stop ripping people off and then telling them it's their fault."

<Steel flips checkbook at her and walks away.>

I later received a call from the bank VP telling me that my business is no longer wanted. I asked, "Why not? If not for people like me, who would you have to steal from???" Bank VP sounds like a spiteful girl you've kicked to the curb who calls you to tell you that she doesn't want to be with you anymore. Best part is that he lived two houses down from me. Late one night shortly thereafter, I was walking home from the bar. Had to relieve myself. Used his car.

Now, over the course of my life, there are things I have done that I'm truly sorry for and/or embarrassed about. Some of them include:

- Calling my Mother a bad name when I was six years old.
- Punching my Brother in the eye when I was in high school.
- Wearing neon during the 1980's.
- Trying to get my hair to look like Billy Idol's when I was 16.
- Cheating on a girlfriend in the early 1990's. Oh, I'm not sorry that it hurt her feelings when I told her about it. She was a nasty psycho woman and anyone in their right mind would have cheated on her. I'm just sorry that I did so with a less attractive girl. Always trade up.
- My apologies to anyone who I've ever hit in the groin- either by accident or on purpose. Very sorry. That hurts. In fact, I have empathy pain anytime I see someone hit there. Except for those guys on America's Funniest Home videos. They're just stupid and deserve it.

But I will NEVER feel bad for using that snotty VP's car as a porta-potty. NEVER.

That's the way the grand portion of these folks are though. I would rather that the person I initially spoke with had just said, "Because we make it a point to rip every customer off for as much money as we can grab." At least then we'd have begun at a point of conversational honesty. It's not like I didn't understand their motives to begin with. At least if she would have been truthful, the talk wouldn't have degenerated into a conversational teeth-pulling exercise from my end.

And maybe if she'd have done that, the bank VP wouldn't have been wondering why the back seat of his convertible smelled a bit "off". Hopefully, that'll be a lesson to you all...You should NEVER leave the top down on your convertible overnight. You never know who's going to be strolling by.

Next...everything you ever wanted to know about debit cards but were afraid to ask.

And...coming soon...why taking things back to Wal-Mart is teh SUCK!

919191
04-22-2005, 01:46 AM
:beerme: