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The $36 soda: Overdrafting in America

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Re: The $36 soda: Overdrafting in America

#151

Post by nhangen »

eru wrote: post #122
dkokelley wrote: post #55

Earlier quoted context omitted.

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.

How does deposit by phone work?

It's amazing. I started a new job and their paycheck provider screwed up, so I wound up with paper checks. I couldn't afford the delay in mailing them to USAA, so I tried the app deposit method. Take a pic of front, take one of back (after writing a few lines 'deposit only' yada, yada), and it was deposited instantly.

Re: The $36 soda: Overdrafting in America

#152

Post by pinko »

mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

I have no connection to ING Direct other than as a customer, but I love this feature and use it /all/ the time.

I just don't ever have to pay careful attention to my precise balance, since the interest on a day or two of being $50 "overdrawn" is trivial. And every now and then when some huge auto-bill hits or a check I forgot about gets cashed, it simply clears instead of creating a multi-hour hassle for me to clear up.

Re: The $36 soda: Overdrafting in America

#153

Post by tedunangst »

eru wrote: post #127
gujk wrote: post #72

Earlier quoted context omitted.

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.

Your bank should have public documentation about those procedures. So it's not exactly undefined.

The bank does have public documentation about those procedures. Edit: I realize now that may have been your point.

Re: The $36 soda: Overdrafting in America

#154

Post by T-hawk »

mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

Of course all banks could work that way. Their management just thinks it's more profitable to charge the fees instead. (And they may actually be right; these decisions aren't made on a whim; lots of complex analysis goes into it.)

Re: The $36 soda: Overdrafting in America

#155

Post by adestefan »

mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

A lot of banks have this option, but you need to ask about it when you open your account. I decline it since I'm well aware of my balance and would rather not have the open line of credit sitting on my credit report.

Re: The $36 soda: Overdrafting in America

#156

Post by ugh »

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…

It’s not the same everywhere, though. In Germany the fees for using another bank’s ATM are quite high. I think the average is something like 5€ or so.

Re: The $36 soda: Overdrafting in America

#157

Post by r0s »

mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

I prefer the "deny all" option, where any transaction that overdrafts is simply denied at POS.

This is absolutely no problem for small transactions. For larger, potentially inconvenient ones like bills or rent, I really don't see the possibility. Maybe I'm too careful with my money, but I don't usually try to make large payments without checking my funds first.

Re: The $36 soda: Overdrafting in America

#158

Post by stonemetal »

eru wrote: post #122
dkokelley wrote: post #55

Earlier quoted context omitted.

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.

How does deposit by phone work?

You enter the details of the check, how much it is for and the like. You take a picture of the front and back of the check. That is it. They must do some sort of OCR on the image you upload because it usually takes me more than one try before it will accept most of the checks I have tried.

Re: The $36 soda: Overdrafting in America

#159

Post by bbrizzi »

mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

That's how most (if not all) banks work in France. They charge you overdraft fees as a loan at the maximum legal rate (which is about 20% annually, or 1.5% monthly according to Wolfram).

That way, if you have a 2 € overdraft for one month, you'd only pay 3 cents of fees. However, if you have 1000 € of overdraft during one year, you'd pay a total premium of 200 €. Seems to make much more sense than a flat fee.

Re: The $36 soda: Overdrafting in America

#160

Post by thomaslangston »

r0s wrote: post #157
mcherm wrote: post #149

I work for a US bank, "ING Direct". On our "checking" account (electronic payments preferred), our policy for overdrafts works like this: if you overdraw your account, we do NOT charge you an overdraft fee. Instead, we automatically turn it into a loan at typical unsecured lending rates (11.25% today: prime plus 8%). As soon as you deposit enough money to go back to a positive balance, we go back to paying interest o…

I prefer the "deny all" option, where any transaction that overdrafts is simply denied at POS. This is absolutely no problem for small transactions. For larger, potentially inconvenient ones like bills or rent, I really don't see the possibility. Maybe I'm too careful with my money, but I don't usually try to make large payments without checking my funds first.

I concur with a strong preference for a "deny all" option. I have credit cards for when I require a temporary line of credit.
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