Is this a good time to repost the "Don't Buy Stuff You Can't Afford" video?

Live 'n learn. It's only money... Not something actually meaningful.

1) What the heck were you buying that you didn't have enough money in your checking account?! If they were big ticket items (big ticket in college is...$100?), and you have to transfer money into your account to cover the cost, it's kind of obvious you can't afford whatever you were buying anyway.

2) Hindsight is key I guess, but always check your account before making any purchases. Or at least make sure you've got enough to cover whatever you're buying.

3) It sucks when you've got pennies in your account, doesn't it? Stop spending all the money you have in there. Then you won't overdraft when you do spend a little bit of money.

Honestly, I have roommates that have done a whole lot more damage with Wells Fargo. Call the 800, they'll probably meet you halfway or so if you're nice and ask politely - be sure to explain you were genuinely confused and this was your first incident. Do it quick before it becomes non-reversible. You won't find a bank that will be more forgiving or not charge overdraft. Just give yourself a few extra days on every transaction and deposit and you'll be fine.

Google "wells fargo sucks"

I can tell you from personal experience that their online account viewing is purposely inaccurate to goad you into over drafting some tasty profitable fees.

In the future, check your account balance BEFORE making any online purchases.

ING doesn't promise very fast transfers, do they? I think they say it can take up to five buisiness days. If you need your money to be more handy, you're better off just putting it in a regular savings account with the same bank your checking is with, so the accounts can be linked. Some banks will do an 'automatic' transfer to prevent overdrafting a checking account if you have a savings account with them.

If you don't have enough money for day to day purchases, you SHOULD NOT BE IN A HIGH YEILD SAVINGS ACCOUNT. Only start one of those if you a) keep enough money in your checking to cover monthly expenses and b) have enough money in a handy savings account to be a 3-months-expenses 'emergency' fund. When you have those two goals met, THEN open the high interest savings account.

I was in a similar situation in April. $100s in overdraft charges and threatening letters and phone calls on a weekly basis.

This all happened while I was on vacation, so I had no idea till I got home to a full answering machine and mailbox.

Anyway, infuriated with Wells Fargo's 800-number (and many, MANY hassles in the past) I went to my local branch and demanded to speak to a manager, who I then told to close my account.

Seems that's all it took to get all the charges removed. It also might help if you're a long time member with Wells Fargo.

ARrrrgh Shiver my timbers. This reminds me of the bad taste of paypal. I HATE paypal. For one, if someone asks for paypal, then I absolutely must use my really old paypal account, which sees use once every year or so. Of course, I move my money around, so the associated accounts on paypal are CLOSED. Paypal makes it all too easy to click pay without knowing where it's coming from. GUESS WHAT? It came from a closed account. I got a little note from my closed account that I was overdrawn... UGH!...

Anyway, why can't they just let me enter a credit card number and click pay? Or at least, if they insist I login with my account, then make it patently obvious which funding source they'll suck money out of.

As a college student who also uses Wells Fargo (though much less now, since there are no branches within like a thousand miles of where I go to school), you can get them to be much, much nicer if you actually go into a branch instead of calling the 800 number.

Basically, my parents and I had a joint savings account where my parents would deposit money for school-related expenses, which I would then transfer into my checking account. Well, my parents got into some financial trouble, and occasionally one of them would take money out of the joint account to cover a bill. Since there's apparently a limit on how many withdrawels you can make per month in a savings account (and they looove to charge you fees if you exceed said amount), they suddenly switched the account over to a checking account. Didn't receive a new debit card, never got checks, started getting charged for having a checking account, etc.

I went into a branch to ask about this. Since I'm of college age, I got the checking account changed to a free college checking account AND the fees refunded, a free set of checks (and fancy ones, not the generic ones they give you), and now I'm waiting on the debit card. They were really, really nice about the whole thing.

In fact, I get more frustrated with the textbook buyback people than I've ever gotten by going into the Wells Fargo branch.

Usually, if you've never overdrawn before, banks will gladly refund you fees on your first mistake - if it was a mistake.

However, since the OP seemed to know right away what the OD fee would be and how the whole system works, it makes me think that maybe this wasn't his first overdraft. If that's the case, any bank is much, much less likely to be sympathetic.

And while the credit union love is more or less deserved - I do think it's getting a bit overhyped here. Credit Unions are not a license to overdraw left and right without penalty; if you're the type of person that spends money you don't have based on a "guesstimate" of what's in your account, you're gonna have a problem no matter where you bank.

The rules are simple, really..

1) When a transaction has happened, the money is GONE. There is no such thing as the "float".
2) Your ATM balance is NOT your real balance. It's affected by holds, delayed transactions, and all kinds of things. Only YOU can know your true balance - by subtracting debits from deposits! Look into Microsoft Money, Quicken, GnuCash, whatever - and tally up your reciepts nightly, weekly - whatever works for you.

3) Never "count" on a transfer being there, especially from another institution. Check deposits can take extra days to clear for no reason at all , and ACH transfers can get delayed.

You just have to start thinking that way.. If it's too much of a pain-in-the-ass, then may I suggest something known as cash.. It doesn't bounce, and you can't overdraw on it.

I've had problems with overdrafts at Wells Fargo in the past, and in my experience, it has been the only thing I'd praise their customer service for. Rather than call the 1-800 number, I went directly to the branch where I opened the account, and actually ended up speaking to the kind woman who helped me open the account many years ago. After explaining my situation to her, she promptly agreed to waive more than half of the fees.

Granted, this was the ONLY good experience I've had with Wells Fargo. Last year I switched to my company's credit union. So much better.

@tcp100: "You just have to start thinking that way.. If it's too much of a pain-in-the-ass, then may I suggest something known as cash.. It doesn't bounce, and you can't overdraw on it."

But you CAN look like an idiot in the checkout line because you're a dollar short on your purchase :-P

a lesson in how this guy should manage his money?

Honestly, I only got hit with an overdraft once....someone held onto a check for quite a few weeks before cashing it, and I overspent my account by about $20 when buying groceries the day it cleared....still can't figure out why it didn't just deny it as a NSF/credit limit style denial and just not let me purchase it.

Anyway, this isn't even about consumers and excessive fees....it is about someone who made a stupid choice and decided to try and float with instant funds.

This is what a credit card is great for.

Also, I'm going to have to disagree with the aforementioned advice about high interest accounts. For students paying tuition each semester, plunking 6g's in a high interest savings account for 5 months is a lot better than letting it wallow in a checking account. The interest I make will take a nice chunk out of my book expenses for next semester. Or help me throw a big party. Either way, I'm ahead of the game.

I used to be terrible when it came to overdraft fees. I tried my best to stay on top of everything, but, inevitably, I would screw something up and get slammed with 2 or 3 all at once, several times a year. I've gotten better about my money management at this point, but for anyone out there looking to avoid excessive overdraft fees, I can't recommend enough ING's Orange Checking account.

4% interest, no minimum balance and free online bill pay. The best part for us habitual over-drafters? No over draft fees. Instead, you are issued an overdraft line of credit, and while the interest is rather high (I believe mine is around 14%), if you cover the balance quickly, in a day or two as I usually did by transferring from my savings account (also with ING now, 4.5% interest), your overdraft charge goes from $25-30 down to around $0.14.

To me, it seems an amazingly fair way to handle overdrafts, and potentially save some people $100s a year.

Did I read that correctly? Did our poor college student not pay cash for a single stamp?

Umm.. I wrote this in.

Yeah, the reason that I didn't have enough money was because I didn't consider shipping costs. It was a mistake. I talked with them for a good hour about any possibilities of reversing it. I have recently opened the ING Electric Orange checking, so I have no reason to deal with Wells Fargo other than have my deposits go there which then transfer to ING.

Yeah, I screwed up. But seriously, if the two payments go through at the same time, they charge you an overdraft on each one? That's just sick. Especially since I had made a conscious effort to try and correct it, acknowledging that I would get an overdraft fee.

This wasn't my first overdraft, but it was the first that was my fault. The other was a banking error which I (stupidly) paid because that was back when I was naive.

(The hour on the phone happened later that night after I wrote an email to Consumerist)

@missdona: i didn't have any on me, and I knew I had transferred enough over to cover both purchases, one overdraft fee, and not have more than $20 left to take from an ATM.

Use credit cards...

Oh, and the worst part about the phone conversation was, at the end, the supervisor/manager person told me, "Glad I could be of service." My response was, "Well, you shouldn't be, because you weren't."

hmmm I say go to a real bank, talk to a real teller, and you'll have a better chance at getting it fixed.

@theDM: also, you have to watch out for the calls you make to customer service, i heard they charge you for those too :P

This is a little underhanded, use paypal to transfer the exact same amounts back into your account from another account. Then call Wells Fargo's 800 number not the local branch, say that Paypal took the funds out by mistake and they realized their mistake and refunded your money. They should be willing to take the Overdraft fees off for you. Not sure if it will work but it may be worth a try. I feel your pain I was a poor college student too.

@theDM: Really, all you need to do is stop talking/writing after "I made a mistake". So because YOU made a mistake, Wells Fargo should bend their policies? It's not something where you called them prior to and they said there would be no problem. You screwed up, you pay the consequences. It's absolutely unreasonable for you to be angry with Wells Fargo for enforcing their policies that you were well aware of to begin with. It wasn't some new policy they sprang on you. Chalk it up to experience and stop making Wells Fargo out to be some crook.

I had a similar experience with HSBC. I was driving cross country and my car broke down. I wont and got a hotel and paid a few cab services which all passed though. Then I had to make a series of local calls ,which from my hotel room required a credit card.

I made about $8 in phone calls and wound up in overdraft at the end of it all for $6-7, that and 24 overdraft fees that combined to over $700.

I was able to get some of the fees reversed because my parents had their mortgage and several accounts with them. That and my situation wasn't one of reckless abandon but being stranded and needing to call the DMV, garages, hotels, etc.

It still cost $200+. Overdraft fees suck. Banks get very rich from them and are loathe to give the money back.

I am bad at keeping track of what I spend on small things here and there. That's why I use credit and then pay it off online from my bank account after looking at my balance online.

@bradg33: well said

Yeah, I screwed up. But seriously, if the two payments go through at the same time, they charge you an overdraft on each one? That's just sick.

@theDM:

Yes, they charge you an overdraft on each one and every bank and credit union does this. Changing to a credit union will not spare you from this. I'm kind of surprised you didn't know this but I'm sure someone would think the same of some of the things I don't know.

This isn't a "Wells Fargo sucks" thing. This is an "the way overdrafts work sucks thing".

@missdona: Um, wouldn't the cash have to come from his Wells Fargo account? I'm not sure how getting $10 from an ATM to buy the stamp would have improved things.

I remember the good old days--1967, when I was a college freshman with my first checking account--when I overdrew my checking account. . the next month I got my statement, with a -$12.00 balance, and a request to deposit funds to cover. Ah, the good old days! I thought they were pretty cool at the time, not to get all panicked about it. :-)

How about you suck it up as a learning experience?

You made a purchase and didn't have enough funds to cover the purchase. ING makes it pretty clear that money transfers take a few days and they can't guarantee a day on which the transfer will post, so it was pointless to rely on that to cover your purchases. WF is being hardassed and unsympathetic, but they're hardly scamming you or treating you unfairly.

Now go get a rewards credit card, use it for everything, and pay off the balance each month.

ING Checking.

you already have an ing savings account so i dont see why you dont just open checking account with them. they account comes with $165 of over draft protecting and the fees are VERY reasonable.

This reminds me of an important lesson I learned when I was just a lad. You know that line on your ATM receipt that says Current Balance ? That doesn't actually reflect the amount of funds currently in your account.

Even better, now the receipts have two lines. One says Actual Balance. The other says Current Balance. They are often different numbers.

Now, going by the common English usage of the words actual and current in this context a reasonable person might assume they refer to the same thing. They would be wrong, and that person would end up paying an overdraft fee.

Been there, done that, with Regions bank. What I loved about them was that they waited a week to inform you that you overdrafted and then blamed you for not checking your account daily.

I think it was Clark Howard who said that banks should not be allowed to charge what often amounts to 1000% - 10,000% interest in overdraft fees, and I agree. These programs are set up to take advantage of people who don't have a lot of money and who don't manage it well -- like college students, high school kids, twentysomethings and lower class people, all of whom can't afford these ridiculous fees.

Banks should be required to allow consumers the option to "opt out" of overdrafts by issuing electronic denials if an account is overdrawn. Most people would rather be embarrassed to discover that they can't buy that soda with their debit card than get even poorer when the fees hit.

As a side note, I have overdraft protection via US Bank, and I've never had a problem with them. You just have to be careful not to rack up lots of overdrafts, since they still cost $10 per pop. But that's not as bad as $25-38 plus daily negative balance fees.

Am I the only person who hasn't complained to my bank when I have overdrawn from my account?

I don't see a story here. The person messed up. The bank is just following the terms and conditions that the customer agreed to.

I've had checking accounts for almost 30 years now and have never once had an overdraft. It didn't take much effort to achieve that record.

Please stop blaming banks for customers own mistakes.

@MissJoanne: I disagree. I'm in college and have a US Bank checking account, and an HSBC Direct savings account. I keep enough in my checking account to get by (probably a bit more than that, just in case) but any excess money I have (basically, anything from my salary that doesn't get spent on food or other things right away) gets dumped into my savings account. Why should it sit in my checking account making no interest when I can have it making over 5% interest? If I want to buy something, I can transfer it back over to checking, or just use my HSBC credit card and in internet banking, pay the card with my savings.

The only regret I have about the OSA is not doing it sooner. For the longest time, I had over $15,000 in tuition/rent/random crap money sitting in a US Bank savings account earning 0.10% interest. I cringe when I think about how much I could've made off the interest in an OSA. Several hundred dollars over the course of my college years. Instead, it was in my US Bank account, where last year, according to online banking, the interest I earned was $17.43. In other words, half a tank of gas. Having that same amount of cash in my OSA would've bought me textbooks for a semester or two.

I ran into this same issue several months back, even after working very hard to never have it happen again after college. Sometimes, when you're living paycheck-to-paycheck (which I had been doing up until very recently), stuff like this happens.

The thing that happened to me was literally a math error on my part. I think I had forgotten to carry a digit in my check register or something like that, so I thought I had more money than I really did. I don't remember exactly. But what it amounted to was over $200 in overdraft fees, even though the fees weren't processed until days after the money was debited from my account (I'm still really confused at that one, given that it was only the overdraft fees that actually put my account into the negative, thanks to a deposit I had made). Had you looked at my account activity, you would have wondered where the fees had come from at all.

The *ahem* helpful lady on the Wachovia customer service line answered it for me in no uncertain terms: The debits to my account did not occur in the order in which they appeared on my account activity screen. Instead, they were processed all at once, come midnight, and they were processed from the largest debit down to the smallest.

The reason behind this, if you ask the CS staff, is because they tend to assume that large payments are "more important" and thus process them in that order for your convenience. What it really does is enables the bank to charge you more overdraft fees than they need to. I'll give you an example:

You have $1,000 in your checking account. Let's assume that you, for whatever reason, believe that you have more than that—say, a math error. On Tuesday, you buy gas at the pump with your debit VISA in the amount of $57. That day, you also mail out your rent check in the amount of $925. On Wednesday, you go grocery shopping and spend $80, also on your debit VISA (hey, you get points when you use it as a credit card), not realizing for whatever reason that $80 will overdraw your checking account.

But wait. Since not all agencies report their credit purchases immediately, the gas doesn't actually get submitted to your bank until Thursday. Meanwhile, the grocery tab was also processed on Thursday and hey, the check you sent for rent got delivered on Wednesday and was also deposited Thursday. Now, the bank will process your account once every 24 hours at midnight (or at least, mine does).

Logically, one would assume that the bank would process these in the order that they were guaranteed by VISA (because that's exactly what they were: guaranteed). In this case, the gasoline purchase would go first, followed by the grocery store, and then your check would be bounced, with, say, a $35 NSF fee—in addition to having to pay your landlord an NSF fee as well and negotiate how to pay your rent later on. This would leave you with $1,000 - 57 - 80 - 35 = $828.

But the bank doesn't see it that way. The bank would process your check first because it's the highest amount. This would leave you with $75 in the bank. Well, that's enough to pay for the gasoline, but alas, the bank will go to the next largest amount, which is the grocery bill. They will debit the (remember: guaranteed by VISA) $80 from your account, leaving you five bucks in the red. They will then tack on a $35 overdraft fee, putting you at -$40. Then, they'll do it all over again with the gas bill, subracting $57 and leaving you with -$97, but wait! They get to charge you another overdraft fee! So what you end up with, instead of the $828 you'd have if they had processed the charges in order, you end up with a whopping -$132 in your checking account.

And the bank is happy, because they got an extra fee out of it. I could have used an example much closer to what happened to me, which involved several small purchases (lunch, cigarettes, etc.). It gets truly ridiculous when you start looking at small purchases made with a debit card.

Yes, the kid messed up. But the bank would have done far more for PR had they been willing to give some of that money back. I know that when Wachovia did that crap to me, I told them that I would never recommend any of their services to friends again and that as soon as I had the opportunity I was closing all of my accounts with them. Did I follow through on all of that? Not exactly—I'm still a customer of theirs, but only because all of the other area banks follow the same shady practices. But I will not recommend their services to anybody, no matter what.

@rgarcia979: They make it a PITA to use a credit card on purpose, I think. Probably they hate having to pay the fees like everyone else. Boo hoo.

This is all banks :( I couldn't even read through the posts.. this isn't about spending money you don't have, this is about being a poor kid (like myself) Sometimes you make that $15 gas purchase, and you forgot that you spent $6.50 at taco bell and you get a $35 freaking dollar over draft fee for the "convenience" of the bank covering that $1.50 that you over drafted. The bank has got your back, yo.

Never, never, NEVER allow PayPal to touch your bank account.

EVER.

Only use PayPal with a credit card. PayPal screws up FAR TOO OFTEN to be trusted with real money.

And make sure the credit card you do attach to your PayPal account has a moderate limit and that it's a HARD limit -- so you can't go over it and be charged fees, but instead the transaction won't go through.

@yg17: Why should [extra cash] sit in my checking account making no interest when I can have it making over 5% interest?

And this person's experience shows you why. Because the fees for even a single overdraft can easily top $50 or even $100. Keep a couple hundred ($200-$300) extra in your checking account. You will not be earning enough in interest to offset your overdraft fees if you make a mistake.

Even better, get overdraft protection -- a short-term line of credit that covers you in case you DO overdraft. The hubby and I have 3 accounts, and so we have 3 lines of overdraft credit, I think for $1000 each. If one of us overdrafts, the bank automatically transfers money into the account from the line of credit (in $100 increments) to cover the difference. If you pay it off at the end of the month (rather than right after incurring it), it's maybe $0.50 for the interest. Beats the hell out of $100 in fees.

@HungryGrrl: You say "Only start one of those if you a) keep enough money in your checking to cover monthly expenses and b) have enough money in a handy savings account to be a 3-months-expenses 'emergency' fund. When you have those two goals met, THEN open the high interest savings account."

Frankly that's stupidly wasteful of the interest income you could be making off that emergency-fund cushion. You shouldn't have it in a CD, as you'd lose the interest earned if you withdraw early, but if you have enough in checking to cover your regular expenses, you should be able to last the 3-5 days it takes to transfer the money back from a high-yield online account if you get laid off or something. Don't cut your float down to a dollar or two, but don't let the value of 3 months' expenses languish in your friendly bank's nice 0.2% "savings" account.

I have an account with BoA, and recently had an incident where I realized that I could be about $70 in the red if I didn't transfer fund immediately (a $3k check didn't clear fast enough). So I transferred $500 from my BoA money market to the checking. According to the subsequent transaction logs, I wasn't quick enough, as BoA charged me an overdraft fee, but then they also credited it back, without my ever having to communicate with them. As a matter of fact, the overdraft credit showed up before the actual overdraft charge...

I guess it helped that 1)I had over $30k in the two accounts combined, 2)I have been a customer for more than 15 years, and 3)they noticed that I transferred the $500 the same day the checking account dipped into the red, and those online transfers between 2 BoA accounts are supposed to be "immediate."

I still can't believe the banking system in the US is so backwards. Here in Ontario, I have a free chequing account. Debit payments are denied (with no charge) if I have insufficient funds, or go through if I opt for overdraft protection, which is $5 for an entire month if I use it. All transactions are debited from the account balance immediately and instantly posted for online viewing. Bill payments are free. It's impossible for me to rack up huge overdraft debts, and I always know EXACTLY how much money is in my account without having to keep some stupid paper ledger.

Does anyone here GET the concept of not spending more money than you have? This isn't brain surgery people! There is no "float" anymore.

Quit whining!

@pinkbunnyslippers: No, no one here gets that. At all.

Of course people "get" that you're not supposed to spend more than you have. But as was pointed out before, SOMETIMES human beings forget stuff.

That's why I offered two suggestions:
1. Keep some padding in your checking account. A dollar you could earn in interest on that padding money in a savings account will be wiped out by the first overdraft fee on your checking account.
2. Sign up for Overdraft Protection from your bank. Smaller banks, maybe CU's, seem to have better options for this than the giant banks.

@DM

You can get these charges reversed!!!

I used to bank at Wells Fargo when I was in college as well. A friend gave me a check that ended up bouncing, and I got knocked with over $200's in overdraft fees from it.

Here's what you do. Go and speak directly, (in person), with the branch manager at your home bank. They and only they have the authority to remove these charges. Explain the situation to them in detail and how you thought that you had the money in the account to cover the expenses. The branch manager, (according to the one that I dealt with anyways), has the authority to remove up to 4 of these overdraft fees! Oh, and playing up the staving college kid angle helps as well.

Again, GO TO THE BRANCH MANAGER AND SPEAK WITH THEM DIRECTLY, Wells Fargo will never remove these charges from your account over the phone.

Good Luck!

I don't feel the least bit sorry. If you can't be bothered to make sure you have money in your account before you spend it, then you have to expect the consequences.

Yeah you can rail against how unfair it is that playing the float doesn't work like it used to, but that still doesn't take away from the fact that the bank didn't do anything wrong. You received a copy of the account rules and regulations when you signed up for the account, and its all spelled out in there.

Any financial institution is going to do the exact same thing that Wells Fargo did in this situation. Let's be honest with ourselves, you're not mad at Wells Fargo's "unfair" policy, you're mad because you screwed up and they're not going to bail you out. Looks like you just had your first lesson in "Personal Responsibility 101".