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The $36 soda: Overdrafting in America

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Re: The $36 soda: Overdrafting in America

#71

Post by jcampbell1 »

Retric wrote: post #61
gtCameron wrote: post #52

Earlier quoted context omitted.

Honest question, since I haven't done it in 10 years, but what is the big hassle in switching banks? Shouldn't it be as easy as signing up for a new account and taking a cashiers check out of the old one and closing it. I'm curious to know what other hurdles they put in place to keep you locked in.

Banks don't close accounts. So you can have a reoccurring charge on a canceled debit card show up on a canceled bank account get charged for it get an over draft, have a negative balance which you get charged for every day. Then once the balance is negative enough they sell your 'debt' to a third party debt collector. PS: The first half of this happened to me costing me close to 300$ in 2 weeks and it's only me doubl…

They don't by default, but they can completely close an account. When they politely refuse, tell them your debit card and checks have been lost and need to be canceled. The bank is on the hook for charges to a debit card that has been reported lost, so it solves the problem of recurring charges to the debit card.

Re: The $36 soda: Overdrafting in America

#72

Post by gujk »

jeffool wrote: post #24
kstenerud wrote: post #8

Earlier quoted context omitted.

Which is why you shouldn't be using such a dangerous service when living check to check. Go to a bank machine, inquire about your current balance, and then extract cash to make your purchases with. Banks may be predatory with fees, but really it's your own responsibility to avoid this trap, and it's not even that hard to do. You can also join a credit union.

I'm not sure why people are downvoting you... I get what you're saying and don't completely disagree. But I think it's worth noting, because I'm not sure if I got the point across: I was intending to overdraft on the final, large fee. The insane overdraft fees only affected me in an unexpected way because they go out of their was to also screw people on the order of withdrawals.

Isn't "intending to overdraft on the big charge" analogous to "intentionally reading from freed memory because you think it hasn't been reallocated yet"?

relying on undefined system behavior is dangerous.

Re: The $36 soda: Overdrafting in America

#73

Post by gujk »

tsotha wrote: post #22

Once upon a time, banks made money by charging interest on loans. Banks don't have to offer checking accounts to make money charging interest on loans. I suspect what will happen if the government starts to get into the business of deciding what fees ought to be charged for this or that the banks will start charging a flat fee to have an account. Once again "advocates" for the poor will end up screwing poor people.

How is it screwing poor people to have a flat fee that eliminates the negative-sum game of debit/credit shuffling?

Even if flat fee was considered bad, by taking away the chance for some folks to skate the line and win, that is trivial to fix with a Federal income tax credit. You can argue against that on liberation grounds, but not bleeding heart grounds.

Re: The $36 soda: Overdrafting in America

#75

Post by [deleted] »

GigabyteCoin wrote: post #68

Almost every bank's overdraft fee in Canada has been pegged at $42.50 for the past 5 odd years, perhaps longer. I just paid $42.50 for mistakenly giving a $3 refund in Canadian dollars via paypal, when both my paypal and my bank were flush with US funds, the simple fact that I mixed up a currency symbol means that refund now cost me $45.50. This is one of the reasons I stand behind the bitcoin idea. Fee free banking…

[deleted]

Re: The $36 soda: Overdrafting in America

#76

Post by nknight »

notJim wrote: post #65
nknight wrote: post #50

Earlier quoted context omitted.

Yeah, tell me, how much are those electrons costing the bank, again? Unless they're also giving you free checks, that's pretty much the cost. A human being will rarely look at anything. Everything is handled by automated computer systems.

I think you're missing out on a lot of things. The bank definitely has costs that go into supporting its customers: branches and employees to staff them (most banks, not all of course), phone support people, the very computer systems you talk about, and people to keep them running and add new features to them. Most mainstream banks' free checking accounts make these things available to account holders, so I don't kno…

I haven't set foot in a bank branch in over a year, and then only to deal with a problem caused by the confluence of their antiquated model and that of another company.

I've never once made a phone call to, or received one from, my current bank in the ~7 years my current checking account has been open.

I don't know who you think they're maintaining such anachronisms for, but it ain't this free checking user.

The computer systems have to be created and maintained for their wealthy depositors regardless. The marginal cost of adding less affluent customers is laughable, and more than paid for by the interest they can earn from a few hundred dollars in deposits.

Re: The $36 soda: Overdrafting in America

#77

Post by gujk »

ajaimk wrote: post #27
andrewljohnson wrote: post #23

I agree that banks are predatory, but the fact that people can't keep ~$500 in their bank account indicates they are spending more than they are earning. When someone can't keep an extremely small amount of cash on hand at all times. it doesn't mean they are living paycheck to paycheck and just netting zero - it means they are accruing debt every cycle, and then struggling to stay cash flow positive in any way necess…

I would like to disagree regarding the fact that over-draft fees are the realm of the poor. I've had the misfortune of being charged overdraft fees twice and both times were because I accidentally swiped my debit card and then realized I'd overspent. Both times, I wasn't spending more than I had. I had a substantial amount of cash in a separate saving account as well as my investment account. It was just my checking…

What the heck bank is this? I bank with the reviled BofA, and once a year or so I misjuggle my accounts and bounce something, and every time they courtesy credit the fee, which is their official policy.

Usually when this overdraft sob story is posted to a forum with a call for revolution, it is by someone who is a habitual line skater who is miffed they keep geting caught out.

Re: The $36 soda: Overdrafting in America

#78

Post by Retric »

jcampbell1 wrote: post #71
Retric wrote: post #61

Earlier quoted context omitted.

Banks don't close accounts. So you can have a reoccurring charge on a canceled debit card show up on a canceled bank account get charged for it get an over draft, have a negative balance which you get charged for every day. Then once the balance is negative enough they sell your 'debt' to a third party debt collector. PS: The first half of this happened to me costing me close to 300$ in 2 weeks and it's only me doubl…

They don't by default, but they can completely close an account. When they politely refuse, tell them your debit card and checks have been lost and need to be canceled. The bank is on the hook for charges to a debit card that has been reported lost, so it solves the problem of recurring charges to the debit card.

I had reported the card lost which is why it was canceled for 2 months before I closed the account. However, reoccurring charges setup before that point are transitioned into direct bank drafts and continue after that point. As to closing the account, they teller said "it's closed" what are the magic words to say after that?

Re: The $36 soda: Overdrafting in America

#79

Post by gujk »

Qz wrote: post #17

I was discussing this with my friend the other day and she's convinced that if she didn't have overdraft 'protection' there are still certain merchants who run debit cards as credit cards which then incur an overdraft fee anyway. Has anyone heard of this? I'm looking for some evidence I can use to get her to cancel the overdraft nonsense before she gets further in debt.

Call the bank and ask, and consider whether she may be lying to you to protect her preferences.

Re: The $36 soda: Overdrafting in America

#80

Post by jarek »

backprojection wrote: post #39
bdhe wrote: post #6

Earlier quoted context omitted.

It's a very easy trap to fall into if you're living check to check and make even the slightest mistake. In each such story online, I've heard a claim that they specifically have algorithms to maximize the penalty fees on these mistakes. Its another instance of a practice that disproportionately affects the poor. Unless you're living paycheque to paycheque, you would never even bother looking into such niggling detail…

What bothers me the most is that there are engineers who will use their creative skills in such a way. Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit.

> Their precious human capital could be used to create further knowledge and advance progress, instead it's used to exploit.

You'll be the one signing the paycheque, yes?

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