Kiss Courtesy Overdraft Fees Goodbye With WaMu Debit-Only Card?

Whoever came up with the name “courtesy overdraft fee” is one smart cookie. They figured out a way to let you do something you don’t want to do, charge you a fee, and make it sound like they’re doing you a favor. WaMu is one of the few banks that let you…

…opt-out of “courtesy overdraft fees” so that if you use your debit card and don’t have enough money for what you’re swiping it off, they will actually decline your card. However, you have to remember to never swipe as credit, only as debit.

Reader Jon thinks he’s got it figured out. Opt out of courtesy overdraft screwing, and then ask for a debit-only card. “Voila,” he writes, “you have a checking account and debit card immune to shady courtesy overdraft fees.” However, since Chase now owns WaMu, I’m betting you have to already have a WaMu account for this to work.

(Photo: thekateblack)

Comments

Edit Your Comment

  1. Blueskylaw says:

    This is also the reason why its better to have seperate shampoo/conditioner and wash/wax. They give better results when not combined.

  2. Cankles says:

    Wait, I don’t understand what the offer is about… If you swipe it as Debit, it’s used like an ATM card anyhow, right? So it would decline you if you did not have the money in your account… So basically, aren’t they just offering what every bank offers anyhow?

    • Ben Popken says:

      @Incognito: Most banks don’t decline you – they let you overdraft and charge you a fee.

      • Cankles says:

        @Ben Popken: Hmm, I worked at banks from the ages of 16-22, perhaps things have changed in the last 8 years, but you use to have to opt in and set up your own overdraft account.

    • TakingItSeriously is a Technopile says:

      @Incognito:

      Actually no.

      The “Convenience fee” is basically an overdraft fee. Like when you write a check for more than you have, and the bank covers it, but tacks on a $25 fee. Only with a debit card.

      • Cankles says:

        @TakingItSeriously:

        [www.filife.com]

        I have to admit, I’ve never been a wamu user.

      • Cankles says:

        @TakingItSeriously: That only happens when you ask to use it as credit, if you ask to use it as debit, it acts like an ATM card.

        Debit: You put your pin number in
        Credit: It works like a credit cards and yes, then you can overdraw.

        • lihtox says:

          @Incognito: False; I racked up a number of overdraft fees one month by using my WaMu card as a debit card. We subsequently had them remove their “overdraft protection”.

          • Cankles says:

            @lihtox: Did you punch in your pin number to make the purchase?

            • MiltyKiss says:

              @Incognito: I agree with you.

              Most places won’t advertise this (and most banks won’t even tell you this) but if you swipe your debit/credit card and don’t input your pin, it’ll get charged as a ‘credit’. Debit-only cards prevent this as they will be invalid for credit card only transactions (but there are a few stores that I’ve seen that only accept credit card transactions.

              Generally, most banks will let you set up another account for overdraft protection (Bank of America will only let you do it with a Bank of America credit card).

              • Anonymous says:

                @MiltyKiss:
                Actually, I can confirm this behavior happens even when using a PIN — we turned off the courtesy overdraw after it was triggered by a withdrawal from a WAMU ATM (the one time we forgot to check the balance first.)

  3. rpm773 says:

    Whoever came up with the name “courtesy overdraft fee” is one smart cookie.

    Whoever came up with the name “courtesy overdraft fee” has hopefully died in a fire.

    • SegamanXero says:

      @rpm773: what the hell is so courteous about overdrafting? how is it supposed to be courteous to me? Sounds like its me being courteous to them by giving them a extra $30ish because I was “courteous” enough not to keep track of how much cash i had in my account…

      I agree, I hope who ever came up with “courtesy overdraft fee” died in a fire… slowly… painfully…

  4. dareiff says:

    Speaking of overdraft charges:

    I recently made a *lot* of purchases. Like others, I was unaware that I had a big credit card payoff still looming (hadn’t gone through yet.)

    So, I overdrafted by about 100 bucks. I immediately got a notice from Mint, (THANK YOU), and transferred 250 in to checking. The next day, I got BOTH an overdraft for 34 dollars and a credit for 34 dollars.

    So, all banks aren’t bad! (Seriously, I couldn’t believe it.)

    • MiltyKiss says:

      @dareiff: With Bank of America, you can set up alerts that’ll be sent to you (via email or SMS) whenever your account hits a certain amount. This has helped me numerous times, along with their ‘if you make a deposit before 8PM, it’ll be in your account that day’ (which also works with online transfers). :D

      I don’t know how many other banks do this though.

      • humphrmi says:

        @MiltyKiss: I still don’t get it. When I spend money out of my checking account, whether it’s a big credit card payoff or a debit for a cup of coffee, I enter those transactions in my check register – as far as I’m concerned, that money is already spent, whether it’s hit the bank or not. I just don’t see the value of account alerts – doesn’t anyone keep bank registers anymore?

  5. methamp says:

    Does anyone know of any other banks that allow you to opt out of overdraft protection?

    • Coles_Law says:

      @methamp: My bank (People’s) will not sign you up for overdraft protection unless you opt in. They’re local, so I doubt this bank is around where you are, but check local banks.

    • jbellusdlaw says:

      @methamp: I was able to opt out with US Bank. Funny thing was, the manager shot down my request within seconds, but the clerk helping me made a call to corporate and got it done. Of course my goal is still NOT to spend more than I have, but at least if I am dumb enough to try, my bank will decline my card now!

    • TemporaryAphasia says:

      @methamp: It’s not a nationwide bank, but Fidelity Federal in Florida allows you to opt-out. I had asked to opt out when I got my account, but the rep who set up my account didn’t actually set up the account correctly. Months later, thinking I had enough cash in, I got dinged for I think about $30 per charge (and about half a dozen in the span of a couple of days before I realized it had happened – I wasn’t notified at all). Called up and complained and while they did sort of make the valid point that I should know how much money I have, I eventually got them to remove most of the charges since they wouldn’t have happened if they’d set up the account like I’d asked initially.

  6. phixional-ninja says:

    It’s important to remember that this only protects you on purchases where you enter your PIN. If you buy something at Starbucks or McDonalds for example, the charge won’t show up on your account for a few days to a week, and then when it does, there had better be money in your account to cover it, or you’ll get hit with an overdraft anyway.

  7. Corporate_guy says:

    And then your debit card will no longer work at places that don’t take debit. Crippling your debit card to protect you from over draft fees is not really a solution. Banks should be forced to either deny the charge or run it as a cash advance. They should not be able to charge huge fees. It’s not right that they can charge a 30 dollar fee if you overdraft by a nickle.

    • Cankles says:

      @Corporate_guy: But the fact I was trying to convey, is this service is offered at EVERY bank. It’s simple, use your debit card as a debit card, put in your pin number. If you choose credit, you are susceptible to the overdraft. This is true for every debit card.

    • metsarethe... says:

      @Corporate_guy: Don’t over spend and it won’t be an issue, simple as that

  8. Anonymous says:

    “However, you have to remember to never swipe as credit, only as debit.”

    This is nothing new or groundbreaking, but it’s clever that they’re marketing it as such. When you swipe your card as debit, it looks to make sure the funds are available immediately (similar to when you use an ATM).

  9. Cankles says:

    I smell a WaMu rat.

  10. twritersf says:

    Two things:

    First, I never use my card as debit because of the d@mnable terminal fees. 10 cents, 25 cents, and the stores get their money quicker and the banks don’t have to spend money processing paper checks, and the whole thing is more secure. The big companies benefit and I pay? No way.

    Second, I use a credit union. Back in the Darker Days, when my bank accounts weren’t so flush, I would occasionally and mistakenly make a purchase for a few dollars more than I had in my checking account. My credit union automatically would transfer enough money from my savings account to cover the necessary transaction–and never charge a fee for doing so.

    • Anonymous says:

      @twritersf: What is a terminal fee? I’ve been using a debit card for many years, and I have never paid any kind of fee.

    • t325 says:

      @twritersf: Where are you shopping at? I’ve never had to pay a fee for using my debit card, whether I run it as debit or credit.

      Stores should not be charging fees to you, the banks don’t allow them. Their cost of debit transactions is a cost they have to eat

      • West Coast Secessionist says:

        @t325: Arco (45c), many restaurants like Carls Jr. etc. etc. Lots of places charge those fees for using a pin-based card. Some, like Arco, don’t take credit at all so you either pay their stupid little 45c fee, or you pay cash. Or like me you boycott them because fees are lame.

    • Corydon says:

      @twritersf: Yeah, in Colorado at least, buying debit is win-win. I like that the withdrawal from my account is immediate (helps with bookkeeping) and that I can get cash without a fee if I want to, and the retailer pays a smaller fee than they would if the transaction were handled as credit.

      A local gas station that usually has pretty cheap prices actually has a sign on all of their pumps requesting that customers use debit instead of credit because their fees are lower.

  11. jbl-az says:

    Lots of luck getting a debit-only card. I finally gave up and drank the kool-aid when my bank offered to let me have one for an annual (I think!) fee, around $12 as I recall – this was some years ago. They clearly didn’t like the idea.
    I would not be surprised to learn that now you can’t get one at all, so I’m stuck (at this bank) with a debit/VISA for as long as I want debit privileges.

    • Cankles says:

      @jbl-az: Choose the debit card option.

    • Robobot says:

      @jbl-az: Chevy Chase banks offers a debit-only card. I love mine because it keeps me from spending on anything but essentials. As far as I know there are no fees attached to it- besides all the awful fees banks charge nowadays, of course.

      I think Chevy Chase banks are only located in the DC/MD/VA region, but if you’re in the area check them out.

  12. veronykah says:

    I have an online checking with ING and if you spend more than you have in checking they treat it as a credit card transaction and charge you an APR like a credit card. You can also select the amount you want to be able to overcharge.
    Seems like a great idea.

  13. TrinityRS says:

    It’s kind of scary how Americans are ONLY just figuring this out. I’ve never understood why stores didn’t accept debit, or why it wasn’t ever popular down in the states (I’m from Canada, so that probably explains a lot).

    • Ratty says:

      @TrinityRS: Canada’s system isn’t perfect–the Interac machines are dreadful and slow. Not looking forward to my Canadian return’s use of my Scotiabank card. Slow, slow.

      All stores I’ve seen in the U.S. that hit the consumer with fees for using debit have signs from what I’ve seen. In my neighborhood it’s only the gas station that does it. And if a place doesn’t accept debit, most bank cards are credit and debit simultaneously so you’re not SOL.

    • mac-phisto says:

      @TrinityRS: the reason it was never widely adopted was entry cost. the equipment to accept debit cards (basically a PIN pad & swipe terminal) was always much pricier than its credit card equivalent.

      however, it is becoming much more common these days for 2 reasons: 1) there are more vendors providing the equipment, which is driving the cost down & 2) new visa rules for merchants have required virtually every merchant to upgrade their cc processing equipment to comply with new approval regs.

  14. azntg says:

    I dunno how the OP did it, but when I requested for a PIN-only debit card or an ATM card, each and every WaMu employee that I’ve asked said it can’t be done because I have a checking account.

    I was stuck with a Debit Mastercard for as long as I had a checking account.

    • bostonguy says:

      @azntg: When I opened a new checking account at Bank of America earlier this year, I did 2 things.

      First, I opened the new account a couple of months before I needed to use it, so I could transfer everything over in an orderly fashion.

      Second, as soon as I got my shiny new debit card, I called and had them send me a new ATM-only card.

      NOTE: yeah, BofA is supposedly bad, but having checking with them made it easier when I got my mortgage with them this summer…

    • dweebster says:

      @azntg: I requested and have WAMU “ATM-only” cards, and have had friends successfully get them.

      The hitch is that you first have to take their evil debit card. Then you call their customer service number and tell them you ONLY want an ATM card – no VISA, etc stuff. They have them, and they WILL supply them. Just a clusterf*ck hassle to go through the hoops.

  15. tande04 says:

    @Incognito: I’ve never seen it work that way.

    Maybe it has just changed in the last 8 years. I’ve had three banks in the last 5 years or so and none of them (regardless of credit or debit) have declined the card if I don’t have the money.

    • Cankles says:

      @tande04: For those carrying a debt load, debit cards are a wise choice. Using a debit card requires some discipline — some forced and some not. For starters, the money must actually be in the account prior to the purchase.

      [www.bankrate.com]

      • Cankles says:

        @Incognito: I meant to quote that.

        • Cankles says:

          Well, i just looked up several banks and most took the funds out right away…seems like BofA doesn’t…

          • Cankles says:

            @tande04: Wait, I was wrong, BofA handles it that way too:

            “What is the difference between an online and an offline debit card?

            An ATM card is an online debit card, which means your customer’s checking account is debited right at the time of the sale. To accept ATM cards, you’ll need a PIN Pad attached to your terminal so customers can swipe their cards and enter their secret PINS (personal identification numbers).

            Visa® Check Card and MasterMoney® Card are offline debit cards. When these cards are used for purchase, the customer’s account is debited in one to three days after the purchase. To accept an offline debit card, you handle it just like a credit card and swipe it through your terminal.

            Through Bank of America Merchant Services you can accept both online and offline debit cards.”

            [www.bankofamerica.com]

  16. 310Drew says:

    Most banks that have their own atm’s do have atm only cards. You just have to ask for one. Some banks do charge for these, but I know Huntington offers it for free. Charter One does as well, along with Citibank.

    • dweebster says:

      @310Drew: The minute my bank tells me they want even more money to access my money, I politely will walk into said bank with a cotton grocery bag and a withdrawal slip for all of my money, and promptly will walk the $$$ over to a bank that actually WANTS funds in their coffers. Any bank that screws you for not taking their debit card FlavorAde is not a company I choose to patronize with my cash.

  17. sven.kirk says:

    Most banks and credit unions already offer “courtesy overdraft fees” and most will give you option to opt out. They do not advertise it, because it is not going to make them any money from fees.

    Bank will not give you a debit only card. Don’t use it as a credit card then.

  18. lihtox says:

    On a related matter: in any other industry, when you are charged a fine or fee for something, you are given a bill for it which you can then pay or dispute. Banking is the only industry where they reach in and take the fee from you immediately. I’d like to see that outlawed: customers should be billed for overdraft and other fees. (How many people have overdrawn, put in some money to come back up to zero, and then overdrawn AGAIN because of the initial overdraw fees? Too many.)

  19. J.Heck says:

    Or you could, like, actually keep record of what’s in your checking account and NOT overdraft your account. I’ve *never* overdrafted, and my mother has never bounced a check or overdrafted in the 30+ years she’s had a checking account… and this is coming from someone who lives paycheck to paycheck and comes from a home where we’ve done the same. It’s not that difficult to balance a checkbook, I promise!

    • metsarethe... says:

      @citnos: +1

    • 310Drew says:

      @citnos:

      I bet you do not use a debit card. Spend cold hard cash. There will be no mistake on how much you have in your pockets !

      • J.Heck says:

        @310Drew: Nope, both my husband and I use a debit card. It takes a whole 10 minutes a night for me to sit down and figure out where we stand.

      • t325 says:

        @310Drew: I use a debit card and rarely have cash on me, and I’ve never overdrafted.

        I don’t know how much is in my account to the penny. I just know that I have, say, about $500 in my account and if I’m going to be spending close to that, I double check first before making the purchase.

        I can check my bank balance on my iPhone with Bank of America’s handy little app. For those of you who don’t have an iPhone or BoA, if you’re ever in a store and unsure of how much is in your account and want to double check before buying, call the number on the back of your debit card and most banks will have an automated system that will tell you your balance.

    • dweebster says:

      @citnos: “Or you could, like, actually keep record of what’s in your checking account and NOT overdraft your account.”

      Are you trying to tell me that I should actually PAY ATTENTION to my financial being and not rely on quick credit to make up for my laziness and inability to plan? What are you, some sort of damn Socialist?

      This country proudly rests on a solid foundation of ignorance, easy credit, and outrageous fees for participating in the first two. We are the “envy” of the world.

  20. please delete me says:

    Good knowing that you possibly can (don’t see why any bank would let you do this, as additional fees are their bread and butter)

    Why would you want this overdraft protection cancelled?

    Your car breaks down and you’re stuck at the service station trying to pay for the parts. $500 bucks, swipe it as a debit, declined.

    Apparently, you don’t have $500. You don’t get charged the overdraft convenience fee, but you also don’t get to pay for your part. You cancelled the credit card, so, in a way, you’re living within your meager means, but you’re also making a complete ass of yourself infront of the cashier, and a bigger ass as you call up friends to come by and loan you some money to get your car fixed up.

    Instead of coming up with to avoid fees when you have no money, why don’t you just put the same work into figuring ways to get more money? Not once in my days have I been charged overdraft fees, because, *gasp* I know how much money I have.

    I’d figure there are some other hidden requirements on this deal, like you need to have a savings account to link with, so the amount that you don’t have is pulled from your savings, squaring away the bank on their end.

    • please delete me says:

      @lihtox: Banks work pretty hard to keep your accounts and I’d assume that if it is something that just popped up out of nowhere, they would waive it, as long as you haven’t in a year’s time.

      They want and need your money a lot more than you know. WaMu gives a lot of “cool” features because they’re desperate to regain some liquidity from all those bad home loans they’re left holding the bag on.

      • Cankles says:

        @Mike Litoris:

        “However, you have to remember to never swipe as credit, only as debit.”

        • please delete me says:

          @Incognito: Right, which is what happens when you choose debit only. I’m just trying to grasp as to what one would use this debit card for?

          What good is a debit card when you have no money in your account? At least if you’re carrying around a suspended license, you can still purchase smokes and beer. Yay, you can opt out of your car insurance since you can’t drive.

    • dweebster says:

      @Mike Litoris: Isn’t a separate “credit card” a much more practical and safer tool for this possibility?

      • t325 says:

        @dweebster: Yes, although I get the feeling that the people who frequently overdraft their bank accounts are not the type of people who should have an actual credit card.

  21. Anonymous says:

    My credit union PSECU, calls this type of card a “check card”. The terms of service http://www.psecu.com/products_services/debit_card/ specifically says that overdraft protection (which is free anyway) does not apply to a check card

  22. Khuluna says:

    I’m with everyone else. I remember when I was like, 12, that this was ALL you could do with your debit: Spend it as debit. One of the reasons why I thought it was a good idea was the total inability to spend money you don’t have. I actually raised a fuss over this with my first checking account.

  23. GreatCaesarsGhost says:

    There’s nothing wrong with not knowing what’s in your account as long as you know you have enough to cover your transactions. If you have so little money in your acct that you can overdraw on a $3 purchase, you need to keep an accurate balance. A bank is not crooked for charging a fee when you overdraw by a small amount. They have to set the threshold somewhere, and 0 is the most logical place to set it.

    Anyone hear of the account to England where all your accounts (checking, credit card, mortgage) are rolled into one account? So if you have a 200K mortgage at 6%, a 1K balance on credit card and 5K in your checking, that would equal a balance of 196K at 6%. You can’t overdraw the checking and the effective interest on both your “checking” and “credit card” is 6%.

  24. Themaestrosartori says:

    I overdrafter my account when I was 20 and then I ended up not paying it for a couple of weeks, turns out I ended up owing 480 bucks to the bank. Of course, they sent me to a collection agency and I finally paid it off. When all of that was said and done with I set up a new account with them, and had them shut off the “courtesy overdraft”, because there is nothing courteous about being charged 30 bucks per instance and 6 dollars a day afterwards. They complied and now I never overdraw my account. OLD NATIONAL BANK. They do it too, but you have to ask for it to be shut off. But like someone else said, I’m not gonna try and buy something if I only have about three bucks in my account. That just saves embarrassment.

  25. deadspork says:

    If I run my debit card as debit, and the funds are not available, my credit union will decline me (unless the funds are available in savings, in which case they will move the funds over free of charge to cover the transaction). If I use it as credit, and funds are not available, the transaction may or may not be approved.

    My CU charges a $20.00 fee for going into overdraft, that will cover up to $500 – and that’s ONLY if there’s $0.00 in savings to cover it.
    I heart my CU

  26. Anonymous says:

    I know that TCF Bank allows an “opt-out” from overdraft “protection”, but good luck trying to find out how to do it. I had to call the customer service line and ask. The representative lead me to a TCF website that was essentially full of generic account terms and conditions. At the bottom of the site was a short blurb about withdrawing from TCF Overdraft protection.

    Here’s the kicker – you can’t withdraw from overdraft protection via any other method than WRITING THE MAIN TCF OFFICES A LETTER. No online requests, no bank branch service requests, no telephone requests. You have to mail them a letter with your full name, your full account number, a signature AND a reason stating why you don’t want it.

    I asked the customer service rep if she thought it was a good idea to send through general USPS mail all of that personal information and she told me that “this is just how it’s done!”

    They obviously don’t want customers knowing about this option. They make it intentionally hard to fulfill hoping that the money will keep pouring in.

    Think about how much PURE PROFIT the bank is making off of these overdraft fees – hundreds of thousands a week, I am sure. It’s sickening really.

    I would rather risk overdraft fees than someone getting my banking information in the mail WITH my signature. Bye-bye bank account!

  27. puka_pai says:

    incognito: This IS with a debit card. Not a credit card, a debit card run with a PIN for every transaction. It’s quite common to have the “courtesy fee” on those now. Things have changed a lot since you got out of the business.

    My former bank — which was a credit union when I opened my account over 12 years ago — added this “courtesy overdraft fee” to our account with very little notice. Literally: It was the 3rd item out of 5 on the very last page of one statement in about 6-point type. It was worded, “If you are eligible for checking overdraft protection…” We had turned down the protection years before when offered, so I didn’t think we had to worry about it. I was wrong, because apparently everyone is eligible at that bank now. You can’t opt out.

    My husband is utterly hopeless about keeping track of his money and so having a debit card kept him straight. If we didn’t have the money in our account, he couldn’t spend it. It was that way for many years. Then one month we were hit with a slew of overdraft charges. Y’all know the drill, one leads to another and they pile up. We received no written or e-mail notice about them, it wasn’t until I did my weekly reconcile that I found them. (We get paid weekly and since you can’t overspend with a debit card I didn’t need to do it more often.)

    When I went to the bank, it was, too bad so sad you agreed to the overdraft protection. No, I opted out, in writing, years ago. Oh, by continuing to have an account with us you tacitly agreed to the new policy. So tacit trumps written? Also, where is my notices of overdraft since by then it had been over 10 days since the first one. Gosh, we dunno, but as a courtesy we’ll refund just one because our policy is that we can only refund one per customer, once a year.

    Paid it off, closed the account, never looked back. My parents and grandmother closed all of their accounts, too, to the tune of over $250k in deposits. And I speak ill of them to my customers whenever possible. They cost me money, I’ll return the favor when I can.

  28. edrebber says:

    If you remove the overdraft protection on your debit card it is also removed for checks. It’s a crime to write a bad check. You can be arrested. Better to keep the overdraft protection in case you bounce a check.

  29. Justifan says:

    think they made those fees illegal in the uk. its clearly predatory and targets lower income people.

  30. edrebber says:

    The overdraft fee is much cheaper than the lawyer’s fee for defending prosecution for writing bad checks.

    • Justifan says:

      @edrebber:
      yea but its not exactly difficult for them to block use of the card when the account is empty or has insufficient funds. we are in the computer era, excuses about not being able to do such things is a load of nonsense. at the very least if they were offering a “service” they’d require a call or call you to confirm you wanted to “borrow” money at 20 dollars a pop.

  31. johnnya2 says:

    There are some unique situations that can cause you to overdraft in much the same way you could by check. Remember this, if you overdraft and they do not pay it, you are still going to be charged the overdraft fee AND possibly a fee from the business you used the card at. An example could be a bar, where they may put a “hold” on your card for $50 and you only spend $20, but until that hold is released you are out the remainder. Hotels have the same policy for so-called “incedentals” which could add $50 or more dollars per night to what the hotel puts “on hold”. Also, when you use your card at gas stations with pay at the pump, most only put $1 until the transaction is completed at a separate date.

  32. morganlh85 says:

    My CREDIT UNION has always done it this way. Which is why I’m sticking with them. :)

  33. quizmasterchris says:

    I’m dropping my bank because of a ridiculous number of fees they hit me over a 10 days recently. It looks like I can join my gf’s credit union, going with that.

    It’s a lot easier to get hit with overdraws than you might think. For one what they call “credit” actually functions in a “debit” sense for fee purposes. I’ll try to explain this best I can on the fly…

    Online banking and ATM are not useful for checking one’s balance; very deceptive. They show you the non-available balance, which can be positive even as they subtract fees for the “credit” making an available balance negative. Even AFTER these things post, in following days, if you don’t go a full calendar day in the red (which I have not been doing), the “Account History” posted online will not show you the same order in which things were credited and debited to your account which a CSR can look at – even in retrospect according to what’s visible to me, I was never in the red.

    Only if I have a negative balance at the end of a business day do I ever see my account go into the red, yet there are four and five fees posting the same day as a deposit that more than covers them plus the original credit purchases… Seems like a very deceptive method of accounting. What’s the point of “credit” if an immediate, fee-triggering hold is put on my available balance? This is just “deceptive debit.”

    Should I keep a positive balance all of the time? I should. I wish I made more money too; I’m working 60 hrs/week and barely keeping my head above water, and I’m not even carrying consumer debt, it’s just a sucky job market.

    If I’m expecting (and this is close to what happened) a $300 electronic deposit tomorrow, and spend $8 on the “credit” option the day before, and have my phone bill come through in an automated sense the day after my $8 purchase, the bank does this in the morning:

    - subtracts my phone bill because that’s the larger charge

    - charges me a $39 fee for an overdraw because the $8 PENDING, AS YET UNPOSTED charge is subtracted immediately from the available balance, which theoretically negative for less than a day, and even then if you settle accounts in a certain order disadvantageous to me

    - then posts my $300 credit

    - then takes $39 from that $300 after the $8 “credit” charge

    - now take $39 in fees each time, which snowballs $12 or $7 etc not make it…

    Twice in a 10 day period I had a SERIES of $39 charges based in $4, $7, $8, $12 purchases ALL of which would have cleared if it weren’t for a snowballing series of $39 fees. I couldn’t get them removed so I’m taking my money out of the bank.

    I’ve usually kept more of a $1800 balance but my work was very unsteady Oct/Nov.

    Also I’d point out that my bank was purchased by another (Citizen’s) and the goalposts were moved on fees and debit rules, and since I usually keep a higher balance I had no notification of this until my balance dipped and I got bitten. Bye bye bank!

    Hope that made sense, hard to explain in this format, plus I’m steamed!

  34. calchip says:

    I looked into this sometime back and apparently there is a Federal banking regulation that REQUIRES banks to give you the option of “opting-out” of “courtesy overdrafts.”

    I ran into this because I used to have this (no overdrafts allowed) on all of my BofA accounts but at some point, “to serve me better”, BofA conveniently turned “pay overdrafts” back on… and charged me a fee when a charge I hadn’t authorized was put through.

    Now… the banks do everything possible to deny that such a service exists, and even some branch managers appear to either be unaware or to claim to be unaware that the option exists, but it is REQUIRED by the Fed.

    At BofA, I finally found someone who had been there for 10 years and knew of the obscure place in the computer where the option could be reset. BofA calls it “Pay No NSF” and before turning on “Pay No NSF”, she dutifully warned me that not only would it prevent paying of debit transactions if there was no money, it would also prevent paying of checks if there was no money… which I said was fine.

    Of course… BofA managed to find a way to screw the customer by linking something people *would* want (paying of overdraft checks, such as one’s mortgage payment or credit card payment) to something people *don’t* want (paying debit transactions when there’s no money in your account.)

    But the option is there by law, you can demand it, and if you are persistent enough, you’ll find someone (at any bank) who can turn it on for you.

  35. miss_roxxan says:

    i use wamu and a few months ago i was standing in line at a branch and a woman was arguing with the clerk about all these fees she was given. she kept saying she had a thousand dollars. but the clerk showed her how two weeks ago she had a thousand, but she kept making purchases. then she went over her thousand and that’s when she started accruing fees. the woman kept getting more and more mad at the clerk and said that they should have told her when she was out of money. i’m sorry, but i believe it is MY responsibility to keep track of MY money. i’m actually glad to have that proctection. i don’t have a lot of money, but i keep track of it down to the penny to make sure i don’t have to take advantage of it. there was one time that i did end up in the red, and i was glad that i was able to make that purchase and then just pay the additional $34 fee.