Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The $36 soda: Overdrafting in America

banksimple.com

Post reply on HN
Print view View original

101–110 of 182 posts

Re: The $36 soda: Overdrafting in America

#101

Post by cperciva »

shabble wrote: post #60
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…

I've heard it mentioned as 'largest payment first', with the stated argument that it's most likely to be a loan or some other important payment, but has the practical effect of triggering charges on way more items. It's For Your Benefit, citizen. (Also, the cash advance interest differential for credit-cards, which is higher, and only paid off after all other charges are covered, rather than any sort of temporal orde…

Also, the cash advance interest differential for credit-cards, which is higher, and only paid off after all other charges are covered, rather than any sort of temporal ordering

FWIW, in Canada credit card issuers are required to apply payments to whichever balances you're paying the highest interest rate on -- it's not even temporally ordered.

Re: The $36 soda: Overdrafting in America

#102

Post by CaptainZapp »

Retric wrote: post #78
jcampbell1 wrote: post #71

Earlier quoted context omitted.

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?

Send a letter by certified mail to the bank informing them that Mr T. Eller confirmed that the account is closed and that any additional fees, costs whatever are not your responsibility any more?

In that case they either have to react or, if they dream up some fantasy fees later, you have at least something in writing (and maybe grounds for a complaint about fraud with the DAs office) ?

I'm amazed with what US banks can get away:

Selling your private data to some sleazy marketing organization, unless you opt out? A criminal offense here

Charging more the 15% annual interest on any credit granted (including cards)? A criminal offense here

Threatening you because some scumbag used your "pre-approved credit card" scamogram (for which you never asked) to defraud you? They'd be laughed out of court

While I don't believe that it should be the governments role to protect consumers from their own stupidity it should crack down hard on this sort of outright fraud. Good faith is a basis of contract law and contracts designed to defraud one party should be outright illegal (and are actually unenforceable in a lot of countries)

Re: The $36 soda: Overdrafting in America

#103

Post by Confusion »

steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

  It's the exact type of behavior I would expect 
  from a bank.
From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all.

In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce when I'm underfunded. That's between me and the companies whose bills bounced.

Re: The $36 soda: Overdrafting in America

#104

Post by joelhaasnoot »

Confusion wrote: post #103
steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

It's the exact type of behavior I would expect from a bank. From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all. In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce…

As a European I still marvel at the craziness of American banks. I just graduated college this summer, working at a startup now, so cash is tight, have some student loans, yet I never overdraft cause I can't. If I could, I know the temptation would be too big. (Do have a credit card though, which essentially is an overdraft as the bill comes the 26th of each month, but is automatically paid in full).

Re: The $36 soda: Overdrafting in America

#105

Post by furyg3 »

Confusion wrote: post #103
steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

It's the exact type of behavior I would expect from a bank. From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all. In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce…

As an American who moved to the Netherlands, I can vouch for this. My fellow countrymen don't know what they're missing:

* There are no ATM fees levied by another bank's ATMs.

* There are no ATM fees levied by your bank for using another bank's ATMs.

* There are no fees or minimum transactions for using your debit card at a business.

* You are allowed to overdraft, you just pay an interest rate to the bank for the money you owe (mine is 10%, up to €2,500).

* There are no bounced check fees, because:

* There are no checks. Non-debit card transactions are done via online banking, are free, and usually instantaneous.

* All banks use 2-step authentication (phishing is nearly impossible).

I was confronted by the joke of US banking again recently when I had to mail someone in the US a check, which they lost, found 6 months later and cashed... generating an overdraft fee in my US account.

Totally unnecessary.

Re: The $36 soda: Overdrafting in America

#106

Post by joelhaasnoot »

furyg3 wrote: post #105
Confusion wrote: post #103

Earlier quoted context omitted.

It's the exact type of behavior I would expect from a bank. From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all. In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce…

As an American who moved to the Netherlands, I can vouch for this. My fellow countrymen don't know what they're missing: * There are no ATM fees levied by another bank's ATMs. * There are no ATM fees levied by your bank for using another bank's ATMs. * There are no fees or minimum transactions for using your debit card at a business. * You are allowed to overdraft, you just pay an interest rate to the bank for the mo…

"There are no fees or minimum transactions for using your debit card at a business." isn't always true. For (small) business with not enough transactions, accepting debit cards is an expense, and below 10 euros they often charge 0.25. Nothing major though.

And the big downside to all of the above? Credit card acceptance is very very low. Tourists can only purchase train tickets by credit card at Schiphol Airport. Everywhere else the option is disabled due to fraud issues.

Re: The $36 soda: Overdrafting in America

#107

Post by chris11 »

dkokelley wrote: post #55
ww520 wrote: post #53

Earlier quoted context omitted.

Is there an easy way to get into USAA for non-military people?

USAA banking is available to everyone. Some nicer services (deposit by phone, insurance) are for service members only. For what it's worth, my brother (Air Force) sold me on USAA after he signed up with them. I worked at Wells Fargo at the time, so I had the best accounts. I'm happy I made the switch. Also, their web interface and iOS apps are excellent. By far the best I've seen.

Their customer service is amazing too. I've never had a bad experience with them.

Re: The $36 soda: Overdrafting in America

#108

Post by wladimir »

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…

Crazy things like overdraft fees don't exist at all where I live (The Netherlands), you simply pay interest on the amount that you get below 0. So I doubt it is a symptom of anything. It's just another way in which the USA's predatory capitalism works.

Re: The $36 soda: Overdrafting in America

#109

Post by steelaz »

steve8918 wrote: post #13

In the book "The Big Short", Michael Lewis mentions how one CEO admitted to an audience that free checking accounts were simply a way of screwing over poor people for all these additional fees, like overdraft, etc. It's really because people with less money need to spend more time managing their money because they are closer to drawing down the account, and the banks are betting on this. It's basically predatory bank…

I had a free checking account with TCF National bank (US). After getting hit number of times with overdraft fee, I went to my local branch, asked for a manager and explained that I want to disable overdraft protection on my checking account. Manager told me he can't do it and that I have to write a letter (they didn't have any forms for that) explaining things and send it to their HQ. Needless to say, I closed my account the same day.

Re: The $36 soda: Overdrafting in America

#110

Post by beseku »

furyg3 wrote: post #105
Confusion wrote: post #103

Earlier quoted context omitted.

It's the exact type of behavior I would expect from a bank. From an American bank. There is no German, Dutch or French bank that does that and I doubt Spanish, Italian or Swiss banks do it. Sure, if I overdraft, I pay (serious) interest over the amount overdrawn for as long as I am overdrawn, but you aren't hit with any fine at all. In fact, I have arranged that I actually can't overdraft. Automatic bills just bounce…

As an American who moved to the Netherlands, I can vouch for this. My fellow countrymen don't know what they're missing: * There are no ATM fees levied by another bank's ATMs. * There are no ATM fees levied by your bank for using another bank's ATMs. * There are no fees or minimum transactions for using your debit card at a business. * You are allowed to overdraft, you just pay an interest rate to the bank for the mo…

Exactly this - the UK banks tried to move closer to their US cousins a number of times, but each time consumers managed to stop a lot of these charges becoming commonplace, particularly with regard to charges or ATM fees.

If you want a really convoluted banking system, try Japan. Its not that you get charged for using another bank's machine, you just can't, with the ned result being that you are always on the hunt for the convenience store that contains your banks machine. My bank also offers no automated payments, and entering payment details is a sea of impenetrable numbers.

Post reply on HN