Comments on: Cruel Overdraft Traps http://www.moneyunder30.com/cruel-overdraft-traps Personal Finance for the Young and Ambitious Sun, 21 Mar 2010 19:06:46 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Amy http://www.moneyunder30.com/cruel-overdraft-traps/comment-page-1#comment-1309 Amy Wed, 20 Aug 2008 13:11:21 +0000 http://www.moneyunder30.com/cruel-overdraft-traps#comment-1309 On Reordered debits, I have run into this with a previous bank account at AM South. They would save up transactions for the whole weekend and then post them on Monday, posting the largest first and then going from there to rack up as many NSF fees as possible. I was so upset that I went in to complain to the bank manager. I was told that I could not speak to the bank manager and that the assistant manager would be the only one to hear my case. After much arguing and several weeks one of the NSF fees was reversed. Shortly thereafter I canceled my account. I still tell people to stay far away from this bank if they're looking. On Reordered debits, I have run into this with a previous bank account at AM South. They would save up transactions for the whole weekend and then post them on Monday, posting the largest first and then going from there to rack up as many NSF fees as possible. I was so upset that I went in to complain to the bank manager. I was told that I could not speak to the bank manager and that the assistant manager would be the only one to hear my case. After much arguing and several weeks one of the NSF fees was reversed. Shortly thereafter I canceled my account. I still tell people to stay far away from this bank if they’re looking.

]]> By: Scott @ The Passive Dad http://www.moneyunder30.com/cruel-overdraft-traps/comment-page-1#comment-1311 Scott @ The Passive Dad Wed, 20 Aug 2008 07:12:13 +0000 http://www.moneyunder30.com/cruel-overdraft-traps#comment-1311 If only it worked the other way as well. My bank removed $8,000 out of my savings account and I found the error a week later. I emailed and called the branch and they said it was an error and someone keyed in the wrong account number. Did I get to collect a $40 penalty from them? Nope. I do understand mistakes happen for banks as well, but when the consumer make an error, they pay for it. It then can become a cycle and is very unfortunate for many people. If only it worked the other way as well. My bank removed $8,000 out of my savings account and I found the error a week later. I emailed and called the branch and they said it was an error and someone keyed in the wrong account number. Did I get to collect a $40 penalty from them? Nope.

I do understand mistakes happen for banks as well, but when the consumer make an error, they pay for it. It then can become a cycle and is very unfortunate for many people.

]]> By: Walt http://www.moneyunder30.com/cruel-overdraft-traps/comment-page-1#comment-1310 Walt Tue, 19 Aug 2008 15:30:45 +0000 http://www.moneyunder30.com/cruel-overdraft-traps#comment-1310 If you set your "debit overdraw amount" to zero, you're still likely to be hit with fees if you try to spend more than you have in your account, but the transaction will be declined. You're actually better off overdrafting, since at least the transaction will be paid. As for the reordered debits, note that banks also reorder credits. Credits get posted BEFORE debits, which works out to your advantage. If you have $700 in your account, spend $5, $10, $25 and then a $700 check is cashed, and THEN you go to the bank to deposit at least $40 in the same business day, you won't have any overdraft fees even though you spent more than you had in the account. When it comes to calling your bank to protest fees, the policies of waiving fees as a courtesy are rapidly going away. With this current market environment we're in, banks are doing everything they can to keep those fees. I don't have a lot of sympathy for people who get hit with overdraft fees. It's a completely avoidable fee...just keep track of what you have and what you're spending, and you'll be fine. For added overdraft protection, set up a small savings account or get a bank credit card. If you set your “debit overdraw amount” to zero, you’re still likely to be hit with fees if you try to spend more than you have in your account, but the transaction will be declined. You’re actually better off overdrafting, since at least the transaction will be paid.

As for the reordered debits, note that banks also reorder credits. Credits get posted BEFORE debits, which works out to your advantage. If you have $700 in your account, spend $5, $10, $25 and then a $700 check is cashed, and THEN you go to the bank to deposit at least $40 in the same business day, you won’t have any overdraft fees even though you spent more than you had in the account.

When it comes to calling your bank to protest fees, the policies of waiving fees as a courtesy are rapidly going away. With this current market environment we’re in, banks are doing everything they can to keep those fees.

I don’t have a lot of sympathy for people who get hit with overdraft fees. It’s a completely avoidable fee…just keep track of what you have and what you’re spending, and you’ll be fine. For added overdraft protection, set up a small savings account or get a bank credit card.

]]>