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Old 07-27-2007, 12:28 PM
 
Location: Michigan
29,377 posts, read 53,450,895 times
Reputation: 21977

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Ever use your debit card and overdraw your checking account, only to later discover that the bank lent you the money -- at a fee -- to cover the overdraft?


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"I don't know what loan sharks are charging these days, but these rates are probably a bit higher," says Eric Halperin, director of the Washington office of the Center for Responsible Lending (CRL). "They're more expensive than any other financial product out there."
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Old 07-27-2007, 12:40 PM
 
7,101 posts, read 26,391,951 times
Reputation: 7436
In other words, keep track of what you have in the bank and don't spend what you don't have.

You can't blame the banks for earning money because you have been sloppy with your bookkeeping.
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Old 07-27-2007, 12:43 PM
 
7,137 posts, read 14,159,711 times
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If you keep most of your money in an overdraft account (i.e. savings acct), that doesn't happen.
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Old 07-27-2007, 01:10 PM
 
Location: South Florida
564 posts, read 1,840,992 times
Reputation: 264
While I agree that it is more often than not the customer's fault for allowing the overdraft to occur in the first place, I think that the banks should have more reasonable response than they currently do.

A good friend of mine has a money management problem. He earns even more than I do, but always seems to find himself coming up short at the wrong times. While I do think he needs to assume some responsibility and fix the problem (he's getting better, btw), his bank has been basically raping him.

I remember one time he forgot about his mortgage payment coming out of his checking account and thought he had plenty in there, so he went to the grocery store for like $20, Taco Bell for $6, and a couple other minimal charges I can't recall at the moment. Well, as it turns out, the first one put his balance below $0, so each of the other charges incurred a separate overdraft charge of $32.00. In total, the bank charged him $96.00 for being at a roughly -$20.00 balance for a day. I remember him saying, "That's the most expensive Taco Bell meal I've ever had ($38.00).

In my view, he deserves to be penalized for poor record keeping, but the punishment should be reasonable and fit the crime. $96.00 is just kind of excessive, in my opinion.
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Old 07-27-2007, 01:22 PM
 
7,101 posts, read 26,391,951 times
Reputation: 7436
Eufo.....that was a hard lesson for him. I'm betting that he won't let it happen again. I agree, you would think that there should be some sort of a limit since it was a small amount. I can see it if he had overdrawn for several thousands each time.

Here's a good example why things work for one, but not for another. I don't think I would forget because it's just my way to sit down once a week and keep track of my money and the bills. My husband would put it off until the end of the month, do it in a hurry to get through with it and probably forget a lot of things.

He doesn't hate it any more than I do. I really, really HATE doing it. It's just that I would rather do it and KNOW it's right and skip the unpleasant surprises. I think that he thinks that everything is going to come out OK.
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Old 07-27-2007, 04:22 PM
 
Location: Maple Valley, WA
982 posts, read 3,202,347 times
Reputation: 451
Well, the banks have to do something, because they're beginning to miss out on their bounced-check fees. People write fewer checks these days.

I used BOA back when it was NationsBank, and I opened a student account with them shortly before I went to college. Fast-forward a few years, I started working full-time and supporting myself. I lived paycheck-to-paycheck, and I didn't have direct deposit set up - it wasn't big back then. I took my check to the bank, gave it 3 or 4 days, then wrote my bills, bought groceries, etc. Never had a problem for the first couple of years I did this. Then they started holding the check. I didn't realize the checks I had written bounced until I started receiving them in the mail, at which point my balanced checkbook was completely screwed up. I then had to wait 7 business days for my paychecks to clear from then on - at which point, I switched banks and got direct deposit.

Long story short, I was responsible with my money. I kept my checkbook balanced, and I still took it up the yin-yang. That was a hard lesson learned.
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Old 07-27-2007, 10:10 PM
 
Location: Somewhere out there
18,285 posts, read 22,438,554 times
Reputation: 41165
I have been with my same local bank all my life, as a child I had a savings account with them. Just this year they started doing this OD thing, I have never bounced a check. All of a sudden I got notices in the mail from the bank about the time I would normally get quarterly savings reports on all our savings accounts. I didn't open them at the time waited until the weekend, huge mistake.

They got me for $298.47 and because it had been over a 2 week they wouldn't refund me. I still don't understand how I was short balanced as they said but it will never happen again. I signed a paper to have that "protection" dropped and if they get a NSF check to my account to take it out of my savings. The cost for this? $2.00 per transfer!
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