Banks and overdraft fees (and debit cards)

[brentspeak]

My bank is Wachovia, also known as "Walk-Over-You". It has a policy of delaying reporting charges customers make on their debit cards (i.e. check cards) by 2 or 3 days. As a result, customers can easily make the mistake of withdrawing too much money from their account before the earlier charges are reported for the customer to evaluate.

That's what happened to me yesterday. I called the number on the back of my debit card to find out how much money was in my account, and withdrew all but $5. The teller even told me, "You have $5 left in your account." Then, today, I discover that charges I made on my debit card three days ago finally appeared on my account -- charges that exceed the $5 I left in the account. $35 instant overdraft fee. Somehow I get the feeling that Wachovia deliberately delays allowing their customers to know the true, up-to-the-minute balance in their accounts so as to trick them into overdrafting.

Anyone else have this experience?

[DURHAM D]

1. You could switch to Bank of America.

On two different occasions the debits have shown up on my account (online) before Papa Johns delivered the pizzas.

[ruthiegrrl]

3. I had similar problem with BofA

They can leave some charges as "Pending." They got me for a $35 overdraft fee. It was my fault for not keeping exact track of the amount in my account but it still stung.

[goclark]

20. Wells Fargo does the same "pending" thing I noticed

Is it true that if you say "Credit" with your card it is best for the merchant and the card owner?

I always say "credit" and I hope that is right.
I do check my account once a week.

[Merlot]

2. Yes, they do the same thing with my minutes on phone

I dial the number to get the amount I have left when it's getting close to the end of the billing cycle. It delays calls for a few days, but reports to the time that you're calling ("as of today you have 56 minutes available"). Then calls from the previous 24 hours show up after I've used up the 56 minutes.
Took me a while and a few fights with the phone co before I figured out what was going on.

[county worker]

4. I started putting all my debit card spending on a spreadsheet along with all the bills I have.

It is a cash flow statement. I reconcile the checking account every morning. It isn't hard if you do it daily.

It also helps to have more money in the bank than you intend to spend.

[DireStrike]

5. You mean like a bank is supposed to do?

The only reason I have a bank account is for the convenience of a debit card, not having to carry around large amounts of cash. It's a very small positive thing in their favor, and a small negative could easily outweigh it and stuff my cash in a mattress or credit union. And this is a fairly large negative.

I haven't heard of a bank that doesn't do this. If I had any real amount of money in the bank right now I'd pull it and find somewhere else to put it.

[onethatcares]

6. credit unions are the way to go.

most offer an account for a minimum amount (mine only wants $5.00, yeah, $5.00) They offer a Visa credit card (variable rate) and a free checking account.

I only use the account as a slush fund to buy coins (numismatics and all that) but I could take the free checking in a heartbeat if I needed to.

[county worker]

13. The bank was never meant to be your bookkeeper.

You have to take it into your own hands. The bank is going to change. It's your choice.

[dugaresa]

7. you are used to real-time transactions, I remember when everything

was done much more "slowly" so as a result you had to watch your own account more meticulously in order to prevent mistakes.

I tend to rely on my old ways since I don't trust that all transactions have been deducted. I do use online banking to check the "real-time" stuff but I am careful to have a cushion in my account just in case ($250 cushion).

Also..on edit.

Do you have the ability to link a savings with checking for overdraft protection?

[StrongBad]

8. This is pretty common (not malicious) and why you may need to manually balance your checkbook.

Also, you can opt out of the overdraft option so that if you debit something you don't have funds for, the transaction just won't go through.

[fizzgig]

9. i was going to post a similar rant today

i checked my bank balance before leaving the house yesterday afternoon and it said i had an available balance of $15 and change. i spent $13 on dinner last night and wake up this morning to a $35 overdraft fee because my available balance was actually $9. $35 for being overdrawn by $4, money that i can't afford to have lost right now.

i don't know which pissed me off most, though. this or the time i got charged $20 because someone wrote me a bad check.

banks are a fucking racket. $10 for a money order i can get at the grocery store for 33 cents and $20 for a book of checks i can get online for $8. i keep meaning to change to a credit union, but i haven't yet. i really need to make it a priority.

[Baby Snooks]

17. The "bad check charges" are the worst....

And really should not be allowed. If you have $100 in your account and deposit $50 and haven't drawn a penny from the account, they still charge you. For a bad check someone else wrote that you deposited but didn't draw off of. And of course if you do, they hit you with an overdraft charge to boot. And after a certain number of days, they add a daily fee until you cover it. So a $20 bad check charge and a $35 overdraft charge can become $150 very quickly if you aren't aware of the policy which of course they don't notify you of when they notify you of the charges against your account.

They claim the charge for the returned check is a "processing" fee. And have fun getting the check back. You're lucky if you do. Some banks will run it through the following day and it will be paid. But they have still charged you for the first time.

The banks make millions off this scam every year. If your bank allows it, it's wise to have a savings account tied into the checking account although that can be dangerous if your debit card is stolen.

You're only liable for $50 in most cases but of course the bank doesn't credit the $1,500 in charges until they've investigated and if your card is ever stolen, make sure you file a police report which tends to speed up the investigation. A little.

The newest scam is the "date of the check" and if you don't have sufficient funds in the account on that date despite the fact the check isn't presented for payment until ten days later when there were sufficient funds, they will still hit you with an overdraft charge.

Anything they can come up with. And get away with.

[regnaD kciN]

10. Try seeing if there's a credit union you could join...

After WaMu got devoured by Chase, I moved my accounts out of there to BECU. Shortly thereafter, I made a massive screw-up, and transferred some money from my savings to the checking account for one of my businesses...and accidentally transferred it to the wrong business account, then made a bunch of planned transactions on the account I thought I had transferred the money into. BECU caught the error, and notified me, but automatically transferred the overage from the savings reserve account I had linked to that checking account without charging me overdraft fees. If that had happened at WaMu, I would have been out around $176 in fees before their (mailed) notice would have reached me.

I'm not saying you shouldn't use some sort of accounting program to track your own expenditures instead of relying on checking your bank balance, since this happens all-too-often, but I also notice that BECU tends to record debit card charges immediately, instead of waiting a few days, a lot more often than WaMu did.

[SoCalDem]

11. E.F.T.s with the use of a pin number are usually instantaneous

BUT, the ones where the clerks have you "sign here", are a different beast altogether.. They are very much a "check".. in 1986, when our store first got the "slide & glides" (what we checkers called them), we were told that the "sign here" feature was for when the machines were "offline"..which happened quite frequently. Of course, tese days with the credit card companies "offering" their "credit" feature to make an ATM turn into a "debit" card, banks were able to incorporate many small businesses into their "slide the card" club, since those cards could be used "like a credit" card..

People often forget that BOTH these features are TIED TO THEIR CHECKING ACCOUNT...and unless you keep track, you will get burned..You are writing electronic checks.

[cbdo2007]

12. yeah, it may be a good idea to start keeping a spreadsheet of your transactions.

I hate to seem really smart here on my first day at DU, but I don't trust my bank and have never trusted my bank or any bank to keep track of my money for me...you know why...cause they aren't as emotionally involved in my personal financial situation as I am.

Here's another tip for you, when you write a check and mail it to someone, it doesn't get subtracted from your account the day you write it, so it may be up to a week or two until the person you sent the check to cashes it. You'll want to keep track of this on your spreadsheet also.

[CreekDog]

14. Why on earth do people do day to day banking at big banks when there are credit unions?

i had Bank of America for years until I noticed they wouldn't link my overdraft to savings but to my credit card and each time it got tapped I had a cash advance fee along with finance charges.

but the credit union down the street not only released my direct deposits earlier than BofA but didn't ding me with fees, or if they did they were tiny in comparison.

i hear a litany of bad reasons why people stay with the big banks (the ATM network --well the credit union's COOP network is bigger actually), and i can't think of any other reasons to stay with them for day to day banking.

i have my savings in Wachovia (aka Wells Fargo :eyes:) because the interest rate was good but i'd never in a million years sign up for a debit/checking deal with them until their terms got better.

why subject yourselves to this?

[Obamanaut]

15. In olden times when there were check books, it was then a bad

idea to write a check for more than the check register showed as the current balance.

Isn't it the same as with a debit card? Isn't there a way to show how much one has spent? Must we rely on someone else to do this for us?

[Trekologer]

16. There are typically two balances: ledger and available

The available balance is what it sounds like: the balance of funds that are available to be withdrawn.

Ledger balance, on the other hand, is not so simple to define. Its technically the amount of money in the account. But there could be funds that are no longer available but have not yet been withdrawn or deposited but not yet available. Most people are familiar with this when depositing in the account. Cash is available immediately but checks have a waiting period which they clear. Similarly, in the other direction, withdraws via a debit card are deducted from the available balance at the point of sale but not technically not withdrawn from the account (and deducted from the ledger balance) until settlement, which is usually after 2-5 days.

The authorization then later settlement is a hold-over from the past when a merchant would obtain authorization for a credit card purchase but the transaction would not be complete until the sales draft was submitted to the processor and at that point the money would change hands. With today's instant processing and rules frameworks (such as PCI), that delay is really no longer necessary. The same goes for the availability delay when depositing a check into a bank account.

[TransitJohn]

18. Not to be a dick

but you should balance your checkbook...I did so before leaving high school.

[SOS]

19. Yes, Crapital One shafted me for $385

Got the monthly statement today.
It is clear that most of the "bounce protection" $35 fees were not justified.
On my way home tonight I carefully examined the statement and made a decision: I'm going to file a lawsuit.
I'll demand a mountain of documents for discovery, have the subpoena delivered to the branch manager and demand that she appear in court.

I'm not taking this shit anymore.

[Statistical]

21. This is the main reason I use a single CC for all the months purchases

USAA total rewards..
gas - USAA
groceries - USAA
fast food - USAA

never big purchases just the daily stuff.
Get the bill pay it via bill pay. One payment covers the whole month.

Card is always paid in full I treat it like cash.

Now if I have a big purcahse or take advantage of Home Depot 0% offer that is always on ANOTHER card.
USAA card is only used for daily purchases and paid in full.