Eh…banks are less evil than a lot of people think, and since my days of working for one, I’ve spent many an hour both here and offline trying to explain both sides of the issue on a lot of unfairly-maligned practices. To use a complaint mentioned in this thread as an example, paying items into overdraft vs. letting them bounce is pretty much a crapshoot as to whether either action would help or hurt the customer, depending on aspects of the individual situation that the bank has absolutely no way of knowing. I’ll spare you examples unless requested, but whichever way they do it, someone’s going to end up pissed.
You will never, however, catch me defending the unadulterated bullshit that is the Unavailable Funds fee. Were I to become Lord of Banking Policy, dumping that thing by the wayside would absolutely be my very first action.
My bank did the same thing. The dates or at least the order on which things appeared to have occurred when I checked online seemed somewhat wonky too. In addition to the overdraft fee they hit me with ‘your balance is still negative a day later’ and a ‘your balance is still negative two days later’ even though they made no attempt whatsoever to contact me regarding the original overdraft to allow me the opportunity to fix the balance, since obviously if I’d known there would be an overdraft I would have put more money in to cover it before hand. Then of course there was the occasional overdraft fee caused by the bank’s random service charges.
The reason? What else? Greed. They consider it a legitimate business practice to screw over their customers.
I finally wised up and quit them. Went to a credit union. Much much much happier there. There’s a much lower overdraft fee, and they don’t screw around with the order of things or service fees to try and get you to overdraft, and don’t find screwy ways of charging multiple overdraft fees for what should be one occurrence.
Leave. Leave NOW! And make sure, after you’ve removed your money, to let them know why you’ve left, and that you’ll be letting everyone you know why you left.
Many on this thread have suggested this. But is it really an option? My understanding is that credit unions are made up of people who work for a specific company, or at least in a specific industry. Am I mistaken? Can I just go into any credit union and open an account?Are there any downsides?
I’d believe this if it wasn’t for the re-ordering of transactions to make big transactions go first. What customer would ever choose to get 5 overdraft fees instead of one by making all five transactions bounce, rather than letting the four that could have cleared go through? It’s an obvious cash grab.
Credit unions are targeted at specific companies (or whatever), however these days, many also include some affiliation groups - which if you’re a member of, you can join the credit union also.
For example: NASA Federal Credit union says they include “select employee groups” and “members of approved associations”: http://www.nasafcu.com/l2.aspx?ci=98 . Typo Knig happened to be in a shopping center where they were opening up a new branch and they were trying to persuade him to join, as some of their groups don’t even have membership requirements.
Now, this is DC metro area where credit unions are pretty big business. But a lot of parts of the country have location-based credit unions - anyone living in a particular county, for example, can join MyCounty FCU. My kids are eligible to join Apple FCU by dint of being students in the local county school system.
Sometimes, simply working onsite at a company (even if you’re a contractor) is enough to get you in. That’s how we got into our CU. Also, being a family member of someone who is a member will make you eligible also (we know someone whose son is in the Navy, and our friend was therefore eligible to be in Navy FCU).
I’d bet there’s at least one credit union you’re eligible for.
Except - if it’s all the same bank, they REALLY should be able to handle any transaction or routine customer issue at any bank. Otherwise what’s the point in having a bank with zillions of branches (OK, ease of making walk-in deposits and avoiding ATM fees, both which can be handled in assorted ways).
Moving the account to the State College branch would essentially require opening an entirely different account, and all the hassle that entails.
One very large North Carolina bank lost my business partly as a result of this.
Well, sure, but that’s a separate issue. By “bouncing vs. paying”, I meant whether overdraft items should be paid with a fee charged, or returned with a fee charged. The order in which they do so is something else again.
I never gave any credence to the company line on the transaction posting order…which, for the record, is something akin to “We pay your larger items first so that, if something is going to bounce, it’ll be your three dollar 7-11 purchase and not your mortgage check.” It’s a brilliant justification, really; it sounds plausible, and is actually true in a particular set of circumstances even more rare than a moment’s thought would make it seem. It’s also patent bullshit, of course; the posting order is designed to increase the number of fees generated.
That said, I don’t think it’s inherently any more “evil” than, say, a cell phone company charging 50 cents a minute for exceeding your plan. Sure, the charge seems inordinately high, but it’s spelled out in black and white and the customer agreed to it. Now, before the lynching party forms, the obfuscatory legalese “terms and conditions” documents are yet another new can of worms. I absolutely think that, ethically speaking, the banks should develop a set of documents which clearly explain the ins and outs of the posting order, check card holds, etc. to new account holders, and knock off the disingenuous explanations after the fact…but that doesn’t make the policies themselves evil.
(I note that I’m straying dangerously out of GQ territory, so I’ll try to knock off the opinion-based responses after this. Anyone up for an “ask the [former] retail banker” thread? ;))
Well, it is, though. With banking transactions, you have no control over when they are actually sent by the merchant and processed by the bank. If you’ve got 100 bucks, and you spend 20 on day 1, and 110 on day 2 - you’d expect the 20 dollar transaction to go through first and the 110 transaction to bounce.
But if the first merchant’s transaction doesn’t happen to get sent until the second day, all of a sudden you’re falling at the bank’s mercies as to how they organize and post transactions. The 110 transaction overdraws (as it should), AND the 20 dollar one as well.
The cell phone example isn’t a good one for this situation (aside from “read the rules” - and I’ve never seen a bank make their posting order policy visible like the cell phone companies do). With a cell phone plan, you have a pool of minutes, docked as soon as you use those minutes. The closest comparison would be if you had a plan for 100 minutes a month, and whatever call puts you over that 100 minutes, you pay 50 cents a minute for that entire call. And the phone company pooled all the calls that day and sorted them by length, so the longest call got treated first, putting you over the limit.
If you had used 90 minutes already, and make a 20 minute phone call, you aren’t charged 10 bucks (20 x 50 cents), you’re charged 5 bucks (10 x 50 cents).
I would LOVE it if you did an “ask the” thread; I agree this one has been answered (very informatively, thanks!), and is now turning into GD or at least MPSIMS. Be prepared for a little bit of hatin’ though, I’m afraid
The simple proof to the above is that they’ve already decided to pay both of them.
Their explanation makes sense only if the Insufficient Funds items are actually going to be unpaid. But if they are going to pay both, it is disingenuous at best, and possibly criminal theft at worst (because they change the meaning of “on hold” and “available balance” at their own whim).
There are different kinds of credit unions. For example, my employer – a major university – has a credit union that can automatically withdraw money from your paycheck and put in a savings acct. They also provide loan services to employees. That’s it.
The credit union I belong to for banking purposes had the word “educators” in the name when I joined (recently the name was changed to something more generic). I believe it was originally aimed at teachers, but the qualifications for joining now include anyone who is employed by any educational institution, anyone who works or resides in zip codes where the offices are located. In addition, a company or organization could ask that their employees be allowed to join. Plus, family members of current members are allowed to be members as well. My CU offers everything I would need from a regular bank – savings, checking, money market, CDs, credit cards, ATMs (although, a limited number), online banking, cashier’s checks, etc. My checking is free because I have direct deposit. The fees for anything else are much lower than they would be at banks. The credit cards are not run like other cc’s – my rate never changes and my limit never changes unless I request it. When you belong to a CU you are a MEMBER, not a “customer.” CUs are, essentially, member-owned. They are run by a board comprised of members. It’s a pretty sweet deal, and it just stuns me that more people don’t join and stick to commercial banks.
Want to see if there’s a CU in your area? Go to http://www.ncua.gov/ and use the Data and Services menu to find a CU.
“A little”? Heh. I used to do this for a living…and with live customers instead of academic hypotheticals. If anything, I’m now far less reviled than I used to be for saying exactly the same things.
I seem to recall that I tried an “ask the” thread a couple years back that died a quick death. Maybe something on the order of “Let’s talk about banking practices!” would do better. I’ll start one when I get home from work.
It used to be that way - the local Teachers Federal Credit Union was only for teachers, and then for people who worked for schools, and then for their families. Now anyone can walk in and get an account. It’s similar to how BJs type bulk item stores used to be only available for businesses and now anyone can get a card. There might still be limited credit unions, but you shouldn’t have too much trouble finding an open one.
I have a “share draft” account (it’s basically a checking account) and a savings account at my credit union. The share draft package that I have is designed for people who don’t write many checks. I don’t get interest on my money, but I don’t pay a checking fee, either. And I get $300 a month in courtesy overdraft. If I write a NSF check, the CU will honor it, and I WON’T GET CHARGED ANY FEE. That’s right. NO FEE for an overdraft, for up to $300 a month. I don’t know if this is indefinite, as I’ve never used this service even once, but it’s certainly an attractive feature.
<pause to let everyone pick themselves up off the floor>
My savings account consistently pays more interest than a similar account at a “real” bank. If I want to take out a loan, I will pay less interest than I would from a bank. So it makes sense for me to do as much banking as possible at the credit union.
The initial deposit for a checking or savings account is far, far smaller than for a bank. I set up my checking account without putting a dime into it, though of course I immediately transferred a comfortable cushion into it. My husband has his paycheck direct deposited, and some of that money is automatically diverted to pay for his truck (he got the loan to pay for the truck from the CU), some to his savings, and some to my checking. When we first started doing business with the CU, the initial deposit for a savings account was $5, and I believe it still is.
I had a small problem with my new checking account and was able to resolve it quickly and pleasantly over the phone.
The drawbacks to this are that the CU is only one place, though it has agreements with other CUs around the area so that I can use those places to get money without paying an ATM fee. Also, they don’t do business loans. I can get a personal loan, or a loan for a car or house or similar, but I can’t get a business loan to start or help out a business.
Yeah, that’s the exact line I got three years ago, when I had a much tighter balance on my checking account, when a chronological analysis of my purchases over a Friday-Sunday weekend would have gotten me one overdraft. Instead, I got hit with five overdrafts. Their justification was, like you said, to process from highest to lowest. A check was cleared on Monday, which put me under my balance and nailed my Friday through Sunday transactions with overdraft fees. When I ask them why they didn’t simply bounce the check as insufficient Funds, they said it was a “courtesy” to me, since I was a long-time customer. Yeah, four late fees versus one insufficient funds fee is a courtesy.
Now, yes, I accept responsibility for not balancing my checkbook and forgetting about the outstanding check but, as of Friday, my ATM was showing an available balance to cover my weekend transactions. It was my Monday check clearing that screwed everything up. If it had cleared on Tuesday, I would have only been hit with one fee. I assumed everything would be processed chronologically and trusted my ATM available balance reading, not knowing that a larger check clearing on Monday would be processed first (since they all were apparently processed on the same business day.)
Anyhow, I got two of the charges knocked off, but I felt only one was legitimate. Really annoyed me, it did.
I’ve got a question (and this is more IMHO) but why does it seem that so few people have an overdraft line of credit set up on their accounts?
We exceed available cash - something obviously I try NOT to do, but life happens - and money is transferred in from the line of credit.
This happened this week - larger than usual Visa bill, and I didn’t transfer quite enough from savings to cover it.
200 bucks from the overdraft line of credit.
Total cost: 16 cents (I paid it off today). I actually feel bad for the credit union, because they’ll spend 43 cents (or whatever) to mail me a notice, which is more than their income from the transaction.
I know money and credit are tight enough for some folks that even a small overdraft loan is not a possibility, but it sure sounds like a lot of people who could get such a line, haven’t.
Honestly, when it happened to me, I didn’t know such a thing was available. My bank had changed from NBD to First Chicago to Bank One to Chase and, along the way, the rules and available services to me had changed. NBD would have bounced that check back in the day, but by the fourth iteration of my bank, apparently it had changed. I was also living abroad during those years and didn’t keep completely up-to-date on the services and rules. Now why anyone would choose NOT to have overdraft protection is anyone’s guess. Seems like something that should be automatically a part of the service, since it doesn’t cost anything to get (so far as I remember), but you do have to opt-in. Anyhow, I did opt-in once my situation happened and was aware of the service.
Count me among those for whom money is so tight that I can’t do it. A few years ago I ran into some unexpected money, and was able to have the overdraft account for about a year, but then things got tight again. I know I have to put aside and save, but I have not been successful, despite many tries.
Yes, that’s similar to what my accounts are called - “share savings” and “share checking.” Because you are a member, the money you have in the institution is your “share” of the holdings.
