Arby's? Gross.

They do that to me all the time at Wachovia. You know what they told me last time? "Keep a checkbook with you, and keep better track of the money you spend." That was after they didn't refund the NSF fee. She should count herself lucky that each one of those pending transactions didn't incur its own fee. They've done that to me as well. It's not pleasant to wake up thinking you've got $4 in the bank and find out you owe $300 in overdraft fees. Of course then they try and pimp the line of credit or a savings account for "just such an occasion."

Banks are bitches.

Bank of America puts deposits that are in the holding section of your account ahead of the debits, which is nice.

Of course moral of the story is to not try floating your cash. BoA gives you a nice little book to monitor all your transactions in, if you have that much trouble keeping an eye on your balance then jot it all in the book, carry the book with you at all times, and if the book tells you that Arbys is going to cause you to go negative, event though you have the check to deposit that afternoon, dont buy Arbys....

Why do we use our debit cards as credit cards again? I've seen this here before but don't know the advantages.

Who's wrong here? Well, watch your money more carefully. And, if you're a bank, don't be an asshole to your customers. Both are equally important.

Also, Grant:

you can't always use a debit card as a debit card, but you don't want to use an actual credit card, and you don't have cash or don't want to fuss around with writing a check which takes a week to clear no matter what.

Grant stole my post. I'll addendum HawkWolf: and if you're a consumer who doesn't like how your bank (Big Box retailer, coffeehouse, cel company, et al.) operates-- choose another service provider. That's a vote that always counts.

I agree with HawkWolf. One one side you have a consumer performing a balancing act and on the other side you have an asshole bank. Both are problems for each other.

This Beth, happens to be my girlfriend, and I'm the one that contacted the consumerist about it. Those of you who are saying that you should keep a ledger are %100 correct. You should do that. The thing is Beth WAS keeping track of her account. If you look at the statement, and subtract that nasty preemptive overdraft fee, the 29.20 would have covered the three pending items that were to clear the next day. The 55 dollars, which was charged either the day before, 9/20, or that day, would have been covered by her paycheck which was to be deposited that afternoon. So those first three negative charges? They're only negative because of the overdraft fee in the first place.

This Beth, happens to be my girlfriend, and I'm the one that contacted the consumerist about it. Those of you who are saying that you should keep a ledger are %100 correct. You should do that. The thing is Beth WAS keeping track of her account. If you look at the statement, and subtract that nasty preemptive overdraft fee, the 29.20 would have covered the three pending items that were to clear the next day. The 55 dollars, which was charged either the day before, 9/20, or that day, would have been covered by her paycheck which was to be deposited that afternoon. So those first three negative charges? They're only negative because of the overdraft fee in the first place.

(if this double posts, i'm sorry)

im pretty sure that a debt card takes the funds instantly regardless of how you run the card... you can run it as a credit card, but it is not a credit card and will not 'hold' the funds.

Man, I used to battle my bank all the time about this. They credited me a couple of times, then simply refused to do it any more. (Then I started making more money and now I'm not always riding the line between red and black, which is how this happens).

Technically, they're right. Some vendors use systems that treat your card as a debit, and others as a credit. So anytime you use your debit card, you should assume it's coming out of your account immediately.

That's the only way you can avoid this -- because if your balance is near zero at the end of every pay cycle and this has happened before it will happen again.

What bothers me is that banks HOLD. Fuck holding, man. This shit should work in real time. This is the 21st Century, if I can wire money to Nepal in 15 minutes my bank should be able to post my 7-11 transactions in real time.

And it's extremely frustrating the way every little god damn thing you do with a bank is consciously engineeredfor easy-to-make errors based on contractual obfuscations to squeeze fees and penalties out of the consumer. I am convinced they put a lot of thought into this kind of stuff. And the best way to deal with banks and credit card companies is to never trust them and always assume they're tryng to screw you at each and every little thing, period. Always assume the worst and always assume everything is working against you.

PS - I think using a debit card for EVERYTHING is over rated. I think having 14 transactions that are like $4.31 for a bag of tacos and $3.21 for a Slushee and Doritos, etc. increases the likihood of overdraft if you are near a zero-balance. It's better to withdraw petty cash. Even now I find it easier to keep track of my finances by budgeting weekly petty cash withdrawals for tacos and Slushees.

I've always maintained that I find it ridiculous that they can't just stop letting us make the charges. You know they're doing it just to capitalize off of overdraft fees. I was always told by Wachovia that it just "couldn't be done" because of the way it works with the credit card.

So I switched banks and, lo and behold, my credit union stops letting me make charges if you go over. The only way you can do an overdraft is through the old fashioned way-- you write a bunch of checks and you don't keep track of em.

Banks do that all the time with the pending charges.

Commerce Bank has an overdraft that's a line of credit. I signed up for a $500 buffer. It works like a credit card with no grace period. You don't pay for it until you use it, but once you use it, it starts accruing interest right away.

In a situation like this, it would have debited $100 from the line of credit (the minimum amount) and you would owe, like $100.08 if you pay it back the next day.

No $34 overdraft charges for me, and it's a lifesaver in some circumstances.

Hasn't anybody else noticed that the overdraft fee was charged the day before she used the debit card to actually go in the red? She still had 29 and change when they charged her a fee that her remaining balance would cover.

I happen to be Beth's boyfriend, and the one that tipped off the Consumerist on the matter. Those of you that are saying that you should always keep a ledger and track your account are exactly right. However, Beth and I ARE tracking our accounts. If you'll notice, before that preemptive overdraft fee, we would have enough to cover those 3 pending charges that are showing as negative. The only charge that SHOULD be showing up as negative in the pending, was the one for 55 dollars, that was made at midnight thursday night, and DEFINITELY would have been covered by the paycheck she was depositing that afternoon.

Even without the overdraft charge she still would have not had enough money in her account for the pending items.

I happen to be Beth's boyfriend, and the one that tipped off the Consumerist on the matter. Those of you that are saying that you should always keep a ledger and track your account are exactly right. However, Beth and I ARE tracking our accounts. If you'll notice, before that preemptive overdraft fee, we would have enough to cover those 3 pending charges that are showing as negative. The only charge that SHOULD be showing up as negative in the pending, was the one for 55 dollars, that was made at midnight thursday night(9/21), and DEFINITELY would have been covered by the paycheck she was depositing that afternoon.(Afternoon of 9/21)

wow, if my comment that i was trying post shows up 99 times, sorry. I didn't notice the part where it said it was in the "invitation queue". Yikes!

That was actually an "Other Customer Annoyance Fee". Beth was being penalized for being that one person who is always at the front of a cashier line charging $3.21 to her debit card.

Seriously, try budgeting. Take out some petty cash and use it through the week.

I don't understand the problem... if she didn't have enough money in her account when she made the charges, she didn't -- and has the fee to show it.

If she wants a grace period, she should use a credit card.

s

Credit card transactions come in 2 parts: (1) Authorize, and (2) Capture. "Authorize" means "make sure the account has sufficient funds and set that money aside for this transaction", and "Capture" means "give the money to the merchant". For some transactions, like when you order something online, there is a long delay between "authorize" and "capture", because mail order rules prevent merchants from charging customers before they ship an order. For point-of-sale transactions, the money is "captured" immediately.

There is a delay between when the charge is "captured", and when the merchant "settles", but it tends to be less than 24 hours, because banks view long settlement delays as risky, and charge higher fees for these transactions.

I am not sure how these processes differ for credit vs. debit, but I'm guessing they're probably identical, except for debit cards, the money is taken out of your checking account, and for credit cards, it is taken out of your available credit.

When your bank labels a transaction as "pending", it could be because the transaction is authorized, or captured but not-yet-settled, or settled and their system just hasn't been updated to reflect the change. No matter what the cause, you should consider that money spent, effective immediately.

Question for the tipster: when did the transactions dated 9/22 actually take place? What was the 'available balance' at the time the bank processed that check for $150? The reason I ask is that my bank sometimes shows 'pending' items dated 2-3 days after I completed the transaction.

Aside from an uninformative customer service response, I don't think the bank did anything wrong here. I think Beth probably needs to learn how to use a checkbook and a debit card. Stop spending more money than you have.

Beth, call the bank and politely ask them to reverse the overdraft fee. Tell them you understand your mistake, and you'll be more careful in the future. If they refuse, ask to speak to a supervisor. If the supervisor won't help, close the account and take your business elsewhere. Even if you feel like the bank screwed you, you'll catch more bees with honey than vinegar.

Just don't have debits floating against an account that won't cover them.

You're just sticking your butt in the snake pit and waiting to get bit.

A myriad of things can go wrong. Happened to me once in the same scenario back in college. I was going to deposit a check to easily cover the coming debits. But wait, oops!, lost the check. BING BING BING! Overdraft - Overdraft - Overdraft!

Since that expensive lesson, I've learned that it's not really that difficult to avoid.

Hey-
This happened to me in the last few weeks. I have two checking accounts. One was running low because of a bunch of $3-$10 transactions (lunch, coffee, etc.). I had plenty of dough in my other account, so I transferred funds immediately after this happened. So my bank was carrying my transactions for 15-20 minutes. Low and behold, they changed the rules about fund transfers between accounts, meaning although they knew damn well I had plenty of money in my other checking account, the transfer was listed as pending. I got hit with $300 in overdraft fees. Total my transactions equalled less than one overdraft fee. They also didn't pay on a check which was a total pain.

I admit I screwed up, but it comes down to common sense. The bank's computers should be smart enough to figure out since the money was coming from an acocunt at the same bank, the money was real.

I called and complained and got a terrible operator. I used the tactics described here a few months ago (see "customer service ninja") and sent emails off to some of the bank officers. A secretary contacted me and explained the problem, was sympathetic and refunded 80% of the fees.

My suggestion is to contact bank officers or regional managers. They usually like to help people and aren't worried about refunding $34 when it means keeping you as a customer.

This isn't about not keeping track of your expenses, but milking customers for fees. I understand this is how banks make money, but the current situation especially with online banking is inflexible. Banks don't post cut-off times, transactions process differently and not in real time. If I spend $40 at Home Depot at 9AM on Monday, why does it show up in my pending activity window? It should be processed in real time. Debit cards used as credit shouldn't let you overdraw. When I asked a bank operator about this, her reasoning was, "Its embarrassing to have your card declined." There is a big difference in:

A) Declining because you have $0
B) Declining because some shoes you bought a week a go take so long to post.
C) Paying $34 for an overdraft of a few cents.

I took commercial paper in law school, got in A in the class, got the highest mark on the bar in commercial paper and this doesn't make any sense.

Credit Unions exist to serve their customers, not their shareholders. I've found my credit union to be awesome. Not once have I felt taken advantage of and the interest rates are considerably higher than banks (and no $50k minimum deposit to get those good rates).

Switch.

That having been said, why not use a credit card? With rewards programs, you can effectively get 1% off everything you buy. If you don't trust yourself to be able to control your spending, I'd highly suggest avoiding debit cards too. It seems to me that actually handling cash will give you a better understanding of how much money you spend and help you create a budget.

pelagius: welcome to the modern world. why carry cash when you can use your bank card, old man?

Their online bank system is very confusing. If you look, at the end of that day, she had 29.20. Usually that should be the end of the story. But then the overdraft fee kicked in, and made the next three pending items appear to be in the negatives. Again, yes, the 55 dollars WOULD have overdrawn her, had she not deposited her paycheck that day.

I assume because pelaguis (olegna and myself) find it very difficult to overdraw cash in our pocket.

I looked more closely, and it occurred to me: Don't debit cards decline if the account has insufficient funds? If so, those transactions dated 9/22 through 9/25 must have occurred before the check cleared. If my math is correct, Beth's had $106.73 available to cover a $150 check. Case closed.

The overdraft most likely came from a hold placed on the credit card...the most likely suspect are the BP/Marathon charges. Hess (and others) down here put a $50-75 hold on card transactions. After some flack about it, they've now posted signs which tell people to push the DEBIT button, otherwise they'll have that $50-75 hold for 7 days. Of course, this is totally dependent upon the gas station's bank and their policies...which is another reason not to use debit cards.

Personally, I'd never use a debit card for transactions. There's virtually no laws protecting you with it, each bank has their own set of rules, and if there is a screw-up, you're SOL until the problem is resolved. Credit cards are fine as long as you treat them LIKE checks and keep a running total going. Now with the internet and online banking, there's no excuse to let debt pile up on the credit cards, and if there's an issue, it's not my money that's in limbo.

I'm also with olegna on this one -- what the hell's up with so many

As far as banks go, I've been with Wachovia for years and can't say enough for them. Probably doesn't hurt that Wachovia REALLY likes me and provides me with white glove service, but I've never had an issue with 'em.

Check 21 eliminated any chance of using float. Besides eliminating the need to transport checks across the country, it also speeds the processing to nearly instantaneously for merchants who have the money to do such transactions. Even those that don't, it cuts a few days off the time funds actually are moved.

Debit cards have pretty much been the same way.

Unfortunately, that speed doesn't apply to deposits. Which seems odd because deposits are usually checks anyway and one would think a bank would be high on the list when it comes to getting funds moved quickly. It takes 24 hours for my direct deposit funds to show up in my checking account.

I run a bunch of small charges on mine occasionally. I agree that cash is better for such things, but I run out and haven't made it to an ATM then I start using the card.

Hasn't anybody else noticed that the overdraft fee was charged the day before she used the debit card to actually go in the red?

I did. Apparently it's ok for a bank to charge an overdraft before it happens.

I think using a debit card for EVERYTHING is over rated. I think having 14 transactions that are like $4.31 for a bag of tacos and $3.21 for a Slushee and Doritos, etc. increases the likihood of overdraft if you are near a zero-balance. It's better to withdraw petty cash.

I'm the opposite. Once I withdraw cash I tend to think of it as already being spent as far as my budget goes. I'm more likely to spend cash that's left over on something I don't really need instead of saving it.

Debit cards are advertised as working "just like credit cards." When you hit your credit limit on a credit card, it declines the charges. Having insufficient funds for a debit should work "just like a credit card" and be denied. The check posted on the 21st; the subsequent charges have later dates--therefore, the overdraft shouldn't have happened because the charges should not have been there in the first place.

Also, the overdraft is fraud, as posted on that statement. Chronologically, it didn't exist until the next day.

I thought banks were supposed to keep track of money accurately. Oops.

Worst part is my roommate had some (legit) overdrafts with National City a few years ago. They hit him with 5 in a day, and refused to give him a "goodwill" credit on any of them. He's a poor college kid. Of course, the bank is entitled to that per the contract, but not showing mercy means that National City are assholes who suck.

I deposited a check into a NatCity MAC machine on a Sunday, Monday was a bank holiday, but they still withdrew the money from the check issuer's account on Monday, causing an overdraft. Be careful of that too.

What is smart about using your debit card as a credit card when your balance is so close to zero?

If you don't like the way your bank does busyness, leave them and find another bank! Personally I use a Credit union that posts my deposits immediately and does not allow me to use my debit card if my balance is below $5

I agree with FLConsumer... I still can't see any benefit of using a debit card. With a credit card you get the float from when you charge and when you're billed so you avoid instances like these. I've had friends say "Oh, but it is hard to keep track of how much I charge to my credit card," to which I say BS. Most credit cards have online services and you can get notified through email or SMS with your daily balance if you really wanted to monitor what you charge that closely.

A checking account is not a revolving credit account. You should not sign for transactions that you don't have the money to cover. It's really that simple. You should count every credit card slip you sign against your debit card as a check that will take X number of days to clear. X = anywhere from 5 seconds to 10 ten days. There is no way of knowing.

These days, you cannot count on ANY float time on your funds anymore. I have also been a starving student who pared her checking balance down to .29 before each payday but it is possible to survive without floating checks/debits/charges on your account.

The problem is more that the charge occured before she was actually in the negatives.

I agree with the "find another bank" comments. I've grown weary of listening to complaints about banks do when most of these complainers go right back and continue banking with them. The banks know people will grumble and say "it's too hard"! and continue bending over for them! Lately the only complaints I care about are those where people want (A) satisfaction and (B) a different company to do business with.

The last time a bank screwed me over (Bank of America) and demonstrated no interest in fixing things, I was in their office 3 hours later closing out my company's commercial checking accounts.

One real advatage to using your debit card as a credit card is that people can't steal your PIN during those transactions . . .

I bank with NatCity and, looking at my account, I see that pending items are always deducted from the account. I guess that when an item is listing as pending, it's the same as a hold on your account. The transaction hasn't cleared, but the money technically isn't available. Pending or a hold -- whatever the bank wants to call it -- it's basically the same thing.

I'm with rectilinear, btw. At least, I used to be. I've got it set up now so that I take out a lump sum of cash for the weekend, but consider it "spent" in my mental budget. Then, when the weekend comes 'round I've got this freedom to spend at will the cash in my pocket, and anything leftover basically goes to paying lunch in the coming week. Debit and credit cards get used for purchases too large for the weekend cash (like 'spensive dinners and such). Best of both worlds, IMHO. Don't have giants wads of good-as-gone cash in my pocket, but I've got enough to spend freely within my budget (so there are rarely charges on my debit card for under $10).
As for Beth's problem, it's that while a bank may not list a transaction as pending until, say, the 22nd, that money was "cleared" out of your account the day the transaction was initiated, possibly on the 19th, 20th, or 21st. It's the fault of the stupid pending/posted web system that makes for this kind of confusion. Stuff doesn't show up as pending immediately, but the bank holds your money immediately.

olegna: This is the 21st Century, if I can wire money to Nepal in 15 minutes my bank should be able to post my 7-11 transactions in real time.

Seriously. The less-than-real-time nature of purely electronic financial transactions is really starting to piss me off.

What I've noticed, from Chase anyway, is that ANY activity from the debit card hits the account immediately and goes into "pending" status. The money is gone right then and there. The status doesn't change to "posted" until the merchant backs up the charge with their transmission. I've seen that take anywhere from same day to 72 hours. My guess is that some of these transactions hit on the 21st, causing the overdraft, and simply have not posted to the account yet.

I too have had the same problem with Wack-off-ia.

The bank sucks, but the holder of the account could save herself a lot of grief and keep some "walking around" money on hand. The majority of these transactions are under $10 and aren't worth the fees.

There aren't any fees if you don't overdraft, WindowSeat. Were you referring to some other fees?