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)
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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?
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.
@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.
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.)
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.
Does anyone know of any other banks that allow you to opt out of overdraft protection?
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.
@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.
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.
@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.
"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).
I smell a WaMu rat.
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.
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.
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.
@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.
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).
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.
@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.
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.
@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.
Well, i just looked up several banks and most took the funds out right away...seems like BofA doesn't...
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.
@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."
@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".
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.)
@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.
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!
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.
@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.
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
@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.
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.
@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...
@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 !
@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.
@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).
This is also the reason why its better to have seperate shampoo/conditioner and wash/wax. They give better results when not combined.