Some of this rant is aimed at ISP’s and other vendors that insist on direct debit arrangements but don’t allow it to be weekday driven so you can avoid having your account hit the fucking DAY BEFORE PAYDAY!!
So I forgot about my AOL debit again. The thing is, AOL is used by others in my family and I use another vendor, so I do tend to forget about it. If it was just a question of the bank overdrawing my account to pay it and charging me one overdraft fee, I could live with that. But what my bank did was this: I had about $60 in various small bank card purchases, and only a little bit over that in the account to cover it. The bank had already earmarked the $60 (i.e., removed it from my available funds), and the money remained earmarked for several days. Then the AOL charge comes in. So through some sort of financial wizardry, they un-earmark the $60 and put it back in the account. Then they start paying off the debts. But do they start with the small items and avoid multiple overdrafts? Of course not. They pay the largest, which is the AOL charge, and then pay off the others. At the end of the day I’m left with three overdrafts–two pizza deliveries and one dry-cleaning bill. Fuck. I wouldn’t be mad if it were just one, because I deserved it. But three! And, as I noted elsewhere, my hard-earned money is going to rich account holders, this being a mutual bank. People who never overdraw their accounts are being subsidized by unfortunate living-payday-to-payday schlubs like me.
I can sympathize, I’ve overdrawn my own account. However, I did that when I was in a college age delirium of cheap liquor and cheaper women. The reason the banks hit the large drafts first is because they don’t want your mortgage to bounce so your pizza guy gets paid. It’s automatic, so they can’t look at it and say, “AOL? Screw them bastards!” Do some basic accounting. There should have been a little (60) in your checkbook before you went on your pizza and dry-cleaning binge.
That’s a good point about paying the mortgage before the pizza guy. But in this case, the AOL charge was just another minor item that had to clear, but happened to be bigger than the others.
At least, in spite of the closing sentence of my OP, it doesn’t really seem that those who are more flush are treated any better. My dad once bought a car with a check, drawn on his business account, which had an ample amount to cover it. However, the folks at the bank thought the signature on the check didn’t look right. So instead of asking him to come in and verify it, the bank bounced it!
Banks charge from largest to smallest for a reason, and it’s not courtesy. It’s to increase the number of bounced checks, and therefore increase the amount of bounced check fees.
I’m all for thinking banks are up to no good, but what proof do you have that the intent is to drive up fees? The mortgage explanation was given to me by a bank manager some time ago. It wasn’t due to an overdraw, they were just giving an explanation of their debit and credit posting policies, so I have little reason to believe it was a lie.
A local TV station that does many investigative reports set up an experiment. They set up accounts at all the major banks and then set up checks to hit this account in different ways.
Every single bank processed the checks so that the maximum possible fee charge was levied.
Counting on covering $60 in bankcard carges, and AOL ($25? - one of multiple household ISPs) causes you to be overdrawn by 2 pizzas and some dry cleaning?
Playing the float game a little close there, mmm?
Maybe you might be better sticking to ramen noodles and wash-n-wear until you get a little more flush.
Okay, so now you know that your imaginary world where debts just disappear and money falls from the sky doesn’t jive with the real world. That lesson alone is worth the fees you paid. Now, wake up and start realizing that the other people out there, including the ones who work in banks, are just as real as you.
People, this is starting to sound a little bit like the haves thumbing their nose at the have-nots.
To the OP: as one who (until I picked up a second job) was forced to use my bank’s’ overdraft protection as an item in my budget, you have my sympathy.
Well, first, there’s my sister, who works at a bank, but honestly, just do the math. Say you have $500 in an account and you have 5 checks for 25, 100, 600, 50, and 200.
Go in order and you get 3 bounced checks.
Go from low to high and you get 1 bounced check.
Go from high to low and DING DING DING! They all bounce!
Now…if you make a good deal of money from bounced checks, which are you going to pick?
Legomancer,
I already shared the explanation I was given, to illustrate it again doesn’t answer the question. I can do the math without a Ding Ding, thanks.
If your sister works in a bank and has credible information, what does she say?
Really now, folks, how did I get drafted into being the guy that defends banking practices? I’m begging you to show that they are up to no good without the anecdotes. Please.
I don’t have any evidence that’s less anecdotal than your own anecdotal explanation, but I think that since the “largest first” system ensures more bounced checks, and they make their money off bounced checks, and they have to have some kind of standard system, and they’d probably choose the system that makes them the most money since they’re a profit-driven entity, it stands to reason that that is probably the impetus for choosing that system rather than making sure your mortgage gets paid over AOL.
Now I grant you, this probably DOES ensure that more important bills get paid over less important ones, since the more important ones tend to be larger. So that’s not a bad way to spin it to customers. But I think it’s more likely that the profit reason came first, and someone else got a nice raise for suggesting this other reason as a way to explain it.
Keep in mind I’m not saying the banks are evil. I’m saying that their reasons are more than likely profit-driven rather than courtesy-driven.
I well recall trying to play the float game - and losing. Wondering what that guy was doing out on my lawn, and then being surprised that the toilet wouldn’t refill after it was flushed. Trying to distinguish between “kinda” final notices and 'really" final notices.
And you know what? I had no one but myself to blame.
This past year I paid off my mortgage.
And you know what? I had no one but myself to credit.
You make your choices, and you live with the consequences.
It pisses me off when I am transferring a large sum of money from one account to another - and if I choose a certain method of transfer the funds are subject to a hold period. But that’s the price I pay for styling my savings/investments in that manner.
If the OP doesn’t like that bank’s way of doing business, he can check out his other banking options. Or keep his cash under his mattress. Or figure out how to eke by with only one internet provider in his household - and maybe buying frozen za instead or delivered if he is that close to his limits.
To me, it seems like the OP wishes to live as tho he has more than he can afford - and he complains that the bank is not willing to subsidize that desire. Boo-fucking-hoo. IME&O, it is generally not a good idea to spend money you do not have.
Banks are not charitable institutions. I feel everyone ought to learn some degree of fiscal responsibility at some point in their lives. This might be a good time for the OP.
javaman’s ISP and general fiscal issues aside, a close re-reading of the OP indicates that the smaller bills had apparently already been debited from his account before the AOL charge hit. When the AOL charge came in, the smaller bills were credited back then all the charges were taken out in size order, thus causing the multiple overdrafts.
I have a serious issue with this, money should be taken out in the order that the charges come in. I can see some reswizzling done within a particular day, but not with charges that are a few days old!
The bank, and the merchants, always get their money at the end of the day. I never said I expected to get away without honoring debts. But the bank’s fees are exorbitant, though not as bad as where I used to bank.
As Cheesesteak just said, the bank had been holding the money that had already been spent; technically however, they didn’t really take it out of the account, but only lower the “available balance”. The “ledger balance” remained where it would be if I had never made those purchases. This sort of thing, combined with the last minute shinanegan described in the OP is unconscienable.
You should have just said what Sailor said and left it at that.
Look, jerk, I don’t have a problem with paying my debts. I don’t think that debts disappear or that money magically falls from the sky. And I watch that account like a hawk and don’t spend a buck without thinking about it carefully. I just forgot the AOL, ok? I don’t see the justice in charging me $42 for the omission.
I never understood the point of those. They assess you for the charge immediately, meaning you do not gain interest on it from the moment of the transaction. As opposed to a credit card, where you can have nearly 2 months float on certain purchases. Plus, with a credit card, you get a percentage of your purchase rebated.
Of course, I am talking about credit cards with no annual fee, where you never carry a balance.
And I have never found myself in a situation where a vendor would not accept at least one of my big 3.
Libertarian, at least you didn’t roll your eyes at me. I actually typed something very snitty but but changed my mind, because I don’t want to be a jerk even in the Pit. I try so hard to avoid overdrafts, and watch every dollar like a hawk. And I’ve come to the point where I refuse to do direct-debit based transactions if I can possibly avoid it.
And Dinsdale, explain your perception that I’m asking the bank to fund my large lifestyle (which, if you must know, is far more accurately characterized by pasta dinners and leftover pasta lunches than extravagance).
Hell, javaman. I really don’t give a damn what you do or how you spend your money. But I’ll wager dollars to donuts that the exact scenario you experienced is set out in fine print in some of the many documents you received from the bank at various times. You fucked up, and now have to pay the price. Boo-fucking-hoo.
The closer you play to the boundaries, the more careful you have to be not fall over. You acknowledged that you have forgotten about a regularly recurring charge more than once. That is nothing other than carelessness. If, for some reason or another, you are unable or unwilling to maintain your records in a manner that prevents you from committing such errors, an alternative would be to change your banking practices to a manner that makes such errors less easy.
Debit cards, and ATM cards, may have some payoff in convenience. But if you are not careful with your records, or are cutting the margins as thin as you seem to be, they can increase the chances of incurring unnecessary charges. And I doubt that overdraft protection does much in the way of fostering longterm fiscal responsibility.
Guess what? Banks do not provide these - or other services - in order to be nice guys. They are under no obligation to look out for you any better than you look out for yourself.