Information

[koala1966]

I'm a little lost on this subject so maybe someone can help me out. It sounds like M'Lee and Laura are talking about two different things?

The only allowable overdraft I'm aware of is when you attach your checking account to a savings account or to your credit card and any overdrafts are then pulled from savings or charged to the card. I've always been under the impression that aside from that "overdraft protection", overdrawing on your checking account was illegal.

What M'Lee is referring too I agree is illegal - writing a check when you know you don't have the money to cover it. In these cases you pay fees to the bank, usually multiple fees because you're not told you've bounced a check until it bounces two or three times. I've known about people who go to jail for bouncing a check, or at the very least go to court and pay lots of fines. I've seen pictures hung in stores of people who repeatedly have bounced checks, and those stores no longer accept checks from those people. In fact in Florida there are lots of places that don't accept checks anymore because of this. But Laura is referring to a service that her bank offers. Is there a service that I'm not aware of that allows people to do this legally, and that only charge you once for doing it? Is this something you have/had to sign up for?

[Flasher]

Tania, the service my bank offers is not tied to a credit card in anyway. In fact, we have no credit cards. But, there was an application process to determine our "limit". The few times we have used it, the banks pays the amount and the bank automatically takes their fee from the next deposit. I agree with MLee that it would be illegal if there was no such service. To write a check knowing there's no way to cover it is illegal. But I write my checks knowing what I have access to.

[Flasher]

Oh, and we are charged for each overdraft. So if something happened and I entered into three transactions, we will be charged three times.

[koala1966]

Tania, the service my bank offers is not tied to a credit card in anyway. In fact, we have no credit cards. But, there was an application process to determine our "limit". The few times we have used it, the banks pays the amount and the bank automatically takes their fee from the next deposit. I agree with MLee that it would be illegal if there was no such service. To write a check knowing there's no way to cover it is illegal. But I write my checks knowing what I have access to.

Thanks, Laura. I really wasn't aware such a service existed. And in that case I agree with you about the whining that adults do for services they choose - for example when people were crying about Blockbuster late fees, even though clearly the way to avoid late fees was to return the movies on time and why shouldn't they charge you if you were late returning them? I think if this service exists at banks, though, that it should be an optional service rather than just given to everyone with an account. And then if people choose the option and use it, they should not complain about paying the fee.

[Flasher]

OOPS!!! I think I just reported my own post---when I was really just trying to delete it!


What I was trying to say was much better said previously.....

This made me laugh soooo hard because I've reported my own post once before, too. I was trying to Edit and the next thing I knew I was turning myself in!

[MamaK321]

I understand your view now Laura, never thought about it that way myself as I feel the opposite. I too have overdrafted neumerous times and I am probably one of those whiners who grumbled about the high fees i had to pay (Bank of America) when, if I'd known the state of my account, I would not have made the purchase. It is not a matter of my being incompetent with my banking and yes, I handle the finances for my household. But when you have more than one person going about on daily errands you can sometimes loose track of what was spent where and how much is left. I certainly don't call my husband with every little purchase I'm about to make. I often wondered that the point of a debit card, enabeling an instant transaction, should never allow an overdraft in the first place. If you don't have the funds to cover the immediate purchase, the card should be declined. If my debit is declined and I have the funds in my credit card (which would be fueling my overdraft protection in the first place) then i'll happily use the credit card and save myself the fees. I don't think the overdraft program should be relied upon when needing to float a payment. The sad truth is that regular old checks are being processed as instant transactions nowadays when they are still useful under those certain circumstances for holding payments until an appropriate time.

[Flasher]

Tania, the service my bank offers is not tied to a credit card in anyway. In fact, we have no credit cards. But, there was an application process to determine our "limit". The few times we have used it, the banks pays the amount and the bank automatically takes their fee from the next deposit. I agree with MLee that it would be illegal if there was no such service. To write a check knowing there's no way to cover it is illegal. But I write my checks knowing what I have access to.

Thanks, Laura. I really wasn't aware such a service existed. And in that case I agree with you about the whining that adults do for services they choose - for example when people were crying about Blockbuster late fees, even though clearly the way to avoid late fees was to return the movies on time and why shouldn't they charge you if you were late returning them? I think if this service exists at banks, though, that it should be an optional service rather than just given to everyone with an account. And then if people choose the option and use it, they should not complain about paying the fee.

Doh! I never understood the customers that complained about Blockbuster late fees either. Speaking of Blockbuster late fees . . . back in 1999 my hubby and I rented "Night at the Roxbury". He was supposed to take it back. I assumed he did and never gave it another thought. THREE MONTHS LATER we went back to Blockbuster (we didn't rent movies all that often) and when we check out we were told we didn't return "Night at the Roxbury" and since we didn't we oved $66.58 in fees!!!!!!! Darling hubby forgot to return it and it had been sitting under his car seat. That movie totally wasn't worth that much money.

[Flasher]

I understand your view now Laura, never thought about it that way myself as I feel the opposite. I too have overdrafted neumerous times and I am probably one of those whiners who grumbled about the high fees i had to pay (Bank of America) when, if I'd known the state of my account, I would not have made the purchase. It is not a matter of my being incompetent with my banking and yes, I handle the finances for my household. But when you have more than one person going about on daily errands you can sometimes loose track of what was spent where and how much is left. I certainly don't call my husband with every little purchase I'm about to make. I often wondered that the point of a debit card, enabeling an instant transaction, should never allow an overdraft in the first place. If you don't have the funds to cover the immediate purchase, the card should be declined. If my debit is declined and I have the funds in my credit card (which would be fueling my overdraft protection in the first place) then i'll happily use the credit card and save myself the fees. I don't think the overdraft program should be relied upon when needing to float a payment. The sad truth is that regular old checks are being processed as instant transactions nowadays when they are still useful under those certain circumstances for holding payments until an appropriate time.

I can totally appreciate that view point. And you're right, very few checks are actually processed like checks anymore.



On a side note . . . you let your hubby have access to the accounts?

[MamaK321]

Remember too that each time your check is run through the bank the company to whom you have written the check is charged a fee. So in essence your hot checks, no matter well intentioned, are part of the reason insurance rates, medical rates, and everything else has gone up over the years. Those fees have to be recovered somewhere. So while you may be willing to cover your end of the bad check fees, the company to whom you wrote the bad check may not.

To occasionally make a mistake in arithmetic is one thing, everyone does this from time to time, but to purposefully write a hot check is just wrong - and illegal.

ahh, I commented on the demise of the goold old check floating system of the past and didn't even think about it from the business standpoint and you're tooo RIGHT! Handeling finances for the PTSA, I have come across too many bad checks that we are fee'd up the whooha for, just to have the checks sent back to use so that we can begin hounding the customer for re-payment plus coverage of the fees. all those add up and drain $100's off our poor school account.

[MamaK321]

On a side note . . . you let your hubby have access to the accounts?

hahahahahahaha
I know some couples have separate accounts but I don't agree with that. **let me add that I personally don't wish to do that, not that other's can't make that their choice.* All our money gets pooled together, we share the bills, the household expenses and then the 'fun money' that is leftover. It has taken us years to finally get in a good routine where we hardly ever have to scrape at the end of the paycheck with $10 left in the account.

[ajkulig]

You can't predict life, but you can save for everything. We have a $1k mini emergency fund and enough money for 3 months living expenses- even though it's unlikely DH will be losing his job since he is in the Air Force- speaking of that since he is an Enlisted member who still makes Senior Airman Pay (even though he is Staff now they have not fixed his pay yet) and we have 4 kids. So we aren't made of money. Until we were completly out of debt and had our emergency funds in place we did not eat out, we did not have the lux items, we never bought anything we cant pay cash for. I would think is this burger worth the $29 Insuffiecient funds fee and the $29 overdraft fee that could happen if some thing were to happen in between pay days? The answer was always no. We had no fancy cable service, we had nothing. I am a lot better for it today though. No car payments, no credit card debt, no over drafts, and saving to pay cash when we buy a house.

[Flasher]

I know a few couples who have separate accounts too, and I don't like that idea for us. We're like you, it took many years to get a system together and with each passing year (or two) it gets easier.

[MamaK321]

This is a great discussion, from reading everyone's input I think the banks are feeling the pinch from too many customers relying on overdraft to cover their expenses. Just like checks outgrew their usefulness, it looks like general overdraft protection will cease and instead be offered as a specialty option.

[averys_mom]

Our bank (Wells Fargo) has a service that you can take an advance on your next paycheck if it is set up as direct deposit. That has saved us from overdrafts more times than I can tell you! You do pay a fee (a percentage of the amount you take), but it's nothing compared to the overdraft fees we would otherwise have incurred!

[Flasher]

Our bank (Wells Fargo) has a service that you can take an advance on your next paycheck if it is set up as direct deposit. That has saved us from overdrafts more times than I can tell you! You do pay a fee (a percentage of the amount you take), but it's nothing compared to the overdraft fees we would otherwise have incurred!

That sounds like an even better idea than what my bank offers!

[deerewife]

We have free overdraft protection as it is tied to our savings account. As long as there is money there, we are fine.

Are they no longer allowing overdraft as an option or just removing the fee?

[Flasher]

We have free overdraft protection as it is tied to our savings account. As long as there is money there, we are fine.

Are they no longer allowing overdraft as an option or just removing the fee?

As I understand it, you can overdraw only at the ATM (by agreeing to the fee), but no longer at the point of purchase.

[milmomma]

I wanted to add, its not something I do regularly, and its something my bank does. It is not like I'm paying 25$ for for a 3$ burger. I understand not having extras. We just got a tv after not owning one for 6 months. I don't have a major bank. My bank is a smaller bank, but has been expanding. It has been not having as many issues as a lot of the big banks. Our bank has been very good to us for years. I don't find it illegal if my bank knowingly lets me do it. Its a policy it has. It has a limit that we can't go over and like Laura's we get overdraft fees for each finance. My bank does not have credit cards that I'm aware of, nor do I truly want one. Credit cards are a temptation that I'm better without. I understand them for emergencies and am trying to work on a savings for that. But sometimes our savings is empty and the bank gives us the choice and we chose it. I don't whine about the fees, I know full well what will be charged. I also pay it as soon as I can. If I get money before our paycheck I put it in to cover the charges. I've had places double charge me and cause me fees and I've still payed them. Its a part of life.

[meteechtap]

We are with a credit union here in ok. It is tied to the military base in our city. We have had the account jointly for a few years now, and in the last two years have really had to live paycheck to paycheck! We recently have had a few instances where we knew we were really close to what was in the account and spend under that amount at the point of sale. Then when we would check the account, it had already cjarged us an overdraft fee even though the account shows we had enough to cover said purchase. We investigated..........If fro example our account has $60 in it, and we spend $45
at the grocery store. If another purchase comes into the pending transaction (say water bill atodrafted for the next day of $45) it automatically pulls the funds from our account,(even though it isn't supposed to hit the account till the next day) and charges us for the "overdraft" and lets our account go negative. I really feel this maniplative on the credit union to charge us this when we clearly don't pay the "bill" till the next day. In most cases we

schedule bill paying to come out the day of payday which is dircety deposited! We have had to learn to check the pending balance as not to overdraft

our account anymore. and make the bank even more (from money we don't have) richer!

[deerewife]

I'm thinking I'm going to stop complaining about our podunk bank that doesn't even offer us a debit card since we get free overdraft!