A couple of months ago my bank offered me an awesome deal for NSF protection. The way it worked is that the bank would take some lump sum out of my bank account, say $1000. Then if I ever overdrew my account they’d pay the overdrawn amount out of the lump sum and only charge me 1/2 of their normal NSF fee!
Normally I’m quite happy with my bank, but that was just insulting.
But my point is there is no legwork I could have done to prevent this. I’m not asking to bank to do something over and above their proper work, just to do their proper work.
This has never been an issue for me and (hopefully) never will be. I only pay rent, credit card bills, and two utilities out of my checking account. That’s all done online, and I never write checks, and NEVER use my debit card except to get cash from an ATM.
In light of some of the stories above, some folks might be better served by using a credit card instead of a debit card for everyday purchases, if it’s an option (I realize that’s not always the case.)
In that light, let me share the Terms and Conditions of this CC I just got offered (bear in mind I just emerged from Bankruptcy, and have accepted a much much better CC offer);
First Premier Bank, Sioux Falls, SD.
Annual Interest Rate: 59.9%
Credit Limit: $300
Processing Fee: $45
Annual Fee (up front) $75.
So you start with $120 charged against your $300 limit just by accepting it.
IF they decide to increase your credit limit (doesn’t appear they ask you, just says if they decide to), by a maximum of $100 each time, they charge you 50% of this ($50) each time.
Want to access your account via the Internet? That will be $3.95
Lose your card and need a replacement? That will be $35
Accepting the card grants them permission to call or text to your cellphone for any reason including Collections. (I don’t have a text plan - I wonder how that would work.)
I threw away the application, but kept the T&C for entertainment purposes.
Like I said, not always an option.
That card is spectacular. It makes me wonder if there’s ever worse out there.
We got an offer about a year ago that if you took all the options(credit protection, etc.), you would go over the starting credit limit by $95.
Just the opening fees were 275 out of 300.
The one and only time I ever had to pay an overdraft fee ($200! They did the largest first thing someone mentioned up thread and I ended up with fees from small amounts that would have been covered if they went small to large…grr) was due to this. Until that point I had no idea that you could use a debit card if you didn’t have the funds to pay for X.
Were any of these horror stories with Credit Unions or just banks? I have my Checking and Savings at the same CU. In case of an overdraft, they transfer enough money over to cover ALL DEBITS for the day, and charge you $5.
I only paid overdraft once. I don’t remember the exact figures, but I got my salary paid and three bills on the same day.
The bank processed the payments (large to small, meaning I paid overdraft on the two small ones) and the salary within five minutes of each other. If they had processed the payments small to large it would have been one overdraft charge; if they had processes the salary first, none. Being used to a banking system which does not allow this (1), I was completely stunned. Heck, it’s been 15 years and I still have problems processing that something like that can be considered “normal”.
Congratulations!
1: money you receive is processed before money you send out. If you get a bill which will send you into overdraft, the bank contacts you to ask what to do (they can return it, hold it or, if you have credit, pay it from credit; returning a bill does not necessarily impact your credit, for example last April my local government autofiled taxes for us self-employed and billed us for the amount they’d estimated, and if you refused payment they took it as “please do not estimate my payments” and it did not impact your credit as they did not report it). If you try to use an ATM card over your limit/account funds, it gets refused with an “insufficient funds”.
I have an automatic overdraft cushion of $300 a month with my CU. That is, I can go into the hole for $300 on my checking account without paying ANY sort of overdraft fee. It’s just part of the checking account setup. I’ve never used this benefit, but it’s there.
Have I mentioned lately that I love my credit union?
Another fun one, (Bank of America), if a credit card is due on Saturday, and you log on to pay it on Saturday, the only option allowed is to pay it on Monday’s date. So, of course, late fee ensues. Luckily, I found a way around it. They have another site specifically for payments for people who have closed their accounts that they REALLY try to avoid telling you about.
The reason I know about the site is because my former MIL made payments to it. The reason I know they REALLY avoid telling you about it is because when I called to complain one Saturday while paying bills, I was smugly told ‘Sorry, Monday payments are the policy’. When I asked about the site MIL used I got hemmed and hawed, and she eventually said “Yeah, you can make a payment through that site and it will go through right away, but it’s really meant for people who have closed their accounts”
I have overdraft protection at my credit union. If I go over by even one cent, they transfer $100 from overdraft to checking, until I’ve hit my overdraft limit. There is no fee, but there is a pretty healthy interest rate (16.99%) on the overdraft until I get it paid back. Oddly they do this only for checks and using my bank card as a credit card. Using the card as a debit card or to get cash does not trigger the overdraft and is declined.
And as long as I’m posting in here now, the way banks order the debits on ones account, in fairness, used to make sense. Banks used to bounce checks, and return them. It was much better to let the checks for the higher amounts (for your house or car payment) go through, and bounce the three checks that you wrote to Liquor Mart. Times and means have changed though, and it makes much less sense today.
My checking* account is with a small, local bank (one that has been around for many decades, still has only maybe seven branches, and appears unlikely to sell out to a large national bank), and they do something similar. I’ve had a couple inadvertent overdrafts and they’ve gone ahead and honored the checks without charging me a fee.
A lot of places credit it to the next business day. I found that out the hard way while I was struggling to pay bills before my bankruptcy. Due the day I get paid, call them or get on-line, find that it won’t be credited until the next business day.