Back in the day, 20 years or so ago, when I tried to take out more money than my bank account held, the ATM would tell me I had insufficient funds. These days I am lucky enough to not have to worry about getting $100 out - I know I have that much at least.
Now my son is old enough to have a bank account - first job and all - not a lot of money mind you, but I think it is important to have an account and to learn to use a bank. So, one day he tries to take some cash out at the ATM - it gives it to him, all is well. Only on the next statement do we learn that he has overdrawn and now has to pay an extra $35… Say what? When I questioned the bank they told me it was a “courtesy”. That “we don’t know why you need the money so we don’t refuse”. Sounds to me like they just like getting the extra $35. Anyway, they also said that all banks do this now so I crossed the street to talk to another bank and they agree. Is this universal now? Does any bank give the " insufficient funds" warning anymore or is it ATM user beware?
In case anyone asks, this is the ATM attached to the side of the bank building, not some remote site.
You need to ask the bank about automatic overdraft protection. I don’t even think it costs anything for banks like Bank of America. That lets you overdraft with no penalty either by debit card or check. The overdraft just spills over into something that operates similar to a credit card account. It is a very nice feature and you don’t have to worry about those charges anymore.
Banks don’t decline debit charges these days, either. I wasn’t paying attention once and got hit with 8 NSF charges one week, one for each time I used my card and drew money I didn’t have. I was able to clear 5 of them, and I asked the girl why they did that. She said it was a necessary change to make card transactions faster; all the bank does is verify that the account is active, and the charge goes through. Heck, that may be what’s happening with your ATM.
I’m 99% sure it’s a BS way of extracting fees from the unwary; if not the primary reason, then it’s a happy little side bonus for the bank.
Those bank charges are about to be ruled illegal over here. The banking industry makes about £3billion a year from the charges alone, so it’s very profitable for them.
My experience is with cash advances from a credit card, but I have noticed similar behavior with checking accounts lately, FWIW. Our set up was to assign each account a credit limit, but to allow it to overextend itself by a certain percentage if need be. For example, a $1000 card might actually have $1100 available. If you’re at $995 and need that extra $100 for whatever reason, the transaction would be approved at a POS or an ATM.
This really was for convenience – we wouldn’t charge an overlimit fee until the next statement cycled, and the balance was over the limit. Most folks would take advantage of the ability to withdraw some emergency funds and pay it back within a month. There was also the option to call in and have this feature removed from your account entirely, as well. Does your bank have that option for the checking account?
I don’t think the bank needs to really give a “warning,” but that’s JMHO. Everyone should be pretty aware of the amount they have in their account. If not, I’ve never seen an ATM that didn’t give you the option to check your balance before making a withdrawl.
If that’s the case, I’m moving to London. I’m broke and getting hit with a $35 fee when I over draft by a few bucks makes me want to burn down the bank (after robbing it).
Of course everyone “should” know. At one time all ATMs that I ever heard of would not let you take out more money than you had in your account. It worked just like a withdrawl at the teller window. I was very surprised to find that was not the case these days. In fact, when I first got an ATM card they charged for account balance information yet they gave the balance on the receipt, so it made sense to take a little out to get that info. Granted, that was a long time ago.
I’m talking here about a 16 year old with very limited funds and no banking experience. Yes, he should have known that the bank would charge him $35 if he tried to take out more than he had and he should always know how much he has. He will pay the money and call it tuition. Now I would like to find a new bank for his and my money that operates the way I like and that I am used to. Hence the question - is this universal?
My bank’s already rewritten their small print, basically turning it into something quite similar to the OP’s situation. There’s no such thing as an ‘unauthorised overdraft’, just a ‘non-negotiated overdraft’ or some such. They have reduced the penalty charge, sorry, ‘non-negotiated overdraft fee’, to £15 and you can’t get it more than four times a month, which seems like their attempt to present it as just covering administration. :dubious:
My current checking account at Bank of America has, on one occasion, paid a debit card transaction of $10 when there was no money, and charged a fee. I’ve never tried to overdraw this account with an ATM, so I don’t know how that would work.
Previously I’ve used Commerce Bank of central PA and Centra Bank of West Virginia. Neither of those banks would allow ATM withdrawals or debit card use if funds weren’t available.
The suggestion about overdraft protection is good, although many banks will see it as a form of credit, so a 16 year old with no credit history might have trouble getting that. BoA and some others will allow you to use the balance of a linked savings account as overdraft protection for a checking account, though. They do charge some sort of fee, but it’s less than the NSF fee. Maybe something like that would help your son?
The account I have carries a small monthly service fee, but it’s waived because we make a regular direct deposit.
Yeah - I discovered that a couple months ago. Bank tried to tell me that an inquiry was the most expensive kind of ATM transaction. I asked what more the computer had to do for an inquiry to warrant that. :dubious: I only got a dumb look in return.
Then I was told that they charge for ATM inquiries because you can look it up on the internet for free. Ahh - yeah. Most everyone has internet access in their car. :dubious:
Bank employee checking in. It’s pretty much universal. We call it an anticipatary limit.
As for why, well ask me at work and I’ll tell you we expect you to know how much is in the account And we let you take more for emergencies. But in reality I think it’s just so they can charge you.
If you kick up a fuss, they can remove the thing that lets you keep spending.
My bank charges 75c for that. And $1.50 for a full printout. Checking your balance on the machine, over the web, or by phone is still free. There’s also an on-the-spot overdraft against a fee of $5.
Interesting. When I was last in the UK, the ATMs couldn’t give you a full printout, but you could order one and it would be sent to you in the mail a few days later. Same with a new chequebook (UK banks do not charge for cheques, normally).
My son made an error as well right after he got his account. It was more his ex girlfriends fault than his. He had bought her an ipod for her birthday and bought her some tunes using his debit card. They broke up a month or so later. She had an itunes gift card but since the account was set up using his debit card it used that to pay for the tunes rather than her gift card.
Cue six weeks later. …Not only did they charge him a $35 fee but that fee is added again every week. He had just moved out and had not changed his address yet. He was still getting mail at my house and not wanting to be a nosey mom I just set it a side. After he got like three things from his bank I thought these can not be just bank statements so I opened one up and it was a letter saying they were going to send his account into collections.
They had charged him $35 a week for the last six weeks. I took him to the bank and explained what happened. They did remove three of the fees but he was forced to pay $105 in fees to get his account straighten out. He did cancel his debit and got a new card.
I think that is just insane. I can see charging a fee for NSF but to charge it every week seems like robbery.
Depends on the machine in question, and also on your bank and on the Link system. If the machine is not one from your bank, you may only have access to a limited number of services. (Me, I don’t care, I check my account every morning online, apart from getting cash the only thing I do at cash machines is top my phone up.)
