Very nice job. I really hope we don't see any "well it was his fault" posts. He clearly admitted that, and he took the proper steps to get BoA to help him.

I love seeing stories like this. We're all human, we all make mistakes at some point or another, and this one at least had a happy ending.

Bravo!

This is why I never use my ATM card for anything but withdrawing cash...I am a firm believer of using a credit card for all transactions in order to #1 have a record of everything I purchase at the end of the month #2 be protected (somewhat) for those purchases and #3 earn points/dollars/coffee/miles/etc. Why use cash for anything if you can use credit??? (obviously, in order for this to work, you need to have the self discipline to not buy what you don't have the funds to pay for at the end of the month when your bill comes due)

@Dooley: I agree...I've been there myself. Sometimes we all make mistakes, and I'm glad he acknowledged his mistake and basically asked for mercy.

Yep- bottom line is the $35 fees are from the pre-electronic era when there was considerable labor invested in processing each overdraft--

There should be a law stating overdrafts are for a percentage of purchase (i.e. 10%) up to a $35 max-- I am sure this would be quite effective in curbing overdrafts and would be a little less punitive.

I'm not going to say "its his fault" but this another one of those circumstances where using a credit card would have avoided all the problems.

@Fuzz: Yeah, it's difficult, since wise credit card use (i.e. paying off balance in full every month) can prevent this, but some people can't handle putting all of their expenditures on a credit card and then also tracking it against how much money they actually have. More people should do this, but don't. Myself included.

I agree that a credit card would have made this less of a problem. What humors me is that many people are quick to say that debit cards are the way to go instead of credit cards.

I don't think he should have gotten them refunded. Reduced maybe, as the exorbitant nature of them is ridiculous, but it's not even one of those "they charged me out of order to screw me" things - he made the rent check first, which means they weren't shifting his money around on him (too much, at least)

You know what I think would be fair? Overdraft fees that are per day, not per transaction. That way, someone in the OP's situation would be out $35 each day until he gets his account out of the red.

Lord knows I've overdrafted before. It sucks, but if the fees were reasonable and in line with actual operating costs, I wouldn't hate banks so much.

Right now we avoid 'em by hooking our checking account to our savings account and setting up email/txt alerts. That and better budgeting skills have kept us from overdraft hell.

@Laura Northrup: And some people can't get credit cards, period. Maybe you made some dumb decisions when you were young and they're still haunting you, years and years later. It's debit or cash for me.

@coren: I'd agree if and only if they charged $35 for the check overdraft, but the debit cards should not have $39 overdrafts for each transaction "for your convenience". $500 in overdrafts is not convenient to me, and obviously not to the OP.

FYI, closing your account when you have a negative balance does not necessarily mean your direct deposit will stop. most banks would require the balance to be satisfied before they will reject electronic deposits.

if you want to stop a direct deposit, be sure to contact your employer (or whoever is depositing the money). generally, you have up until the day the deposit is credited to do this.

@rhys1882: Honestly, I'm bad enough about keeping track of the money in one account, much less comparing it to the other account to make sure I can pay the bill off in full. I use a credit card because the timing of my income does not always match the timing of my expenses, but it's easy to get yourself in the hole. I'll likely drop it altogether (except for online purchases...chargebacks for fraud! wahoo!) once I have the money to pay for everything outright.

@coren: As far as I can tell, he didn't ask for them to be refunded entirely, they just did that as a courtesy. He seemed to just want to make the point that 35 dollars in fees for a 2 dollar purchase is insane. They went all the way and refunded all of it.

Good to hear it all worked out in the end. But sometimes you don't even need to resort to an EECB. Simply talking to the teller and pleading your case is enough to get at least a partial refund sometimes. Looks like that wasn't the case in this scenario, but it never hurts to ask.

@juri squared: I agree. Once I was in a bind and absolutely needed to pay for something while I was waiting for my next paycheck. I figured out that it would have been easier to withdraw $100 from the ATM and deal with that overdraft than pay the $30 or so on my debit card and get overdrawn anyway. Then at least I'd have some cash until payday.

@SacraBos: But the check didn't overdraft - the other things did. They were a ridiculous amount, but they're also not a secret

@katstermonster: He basically said that he shouldn't get overdrafted for little things like his 2 buck cup of coffee. Or at least that's how I'm reading it. The fees he was paying are way too steep, but he knew about overdrafts to begin with too

@JGKojak: I disagree.

It's more detrimental to me if I have an overdraft of $35 on a $2 coffee...where as if I were to have a $0.20 over draft fee on that $2 coffee, I'd just shrug it off as "oh, it's only 20 cents."

While I'm not a fan of a huge overdraft fee, the larger ones make me a lot more careful when I spend my money on things.

@Laura Northrup: How is that any different than tracking debit card transactions against the balance?

Why can't we just have the goddamn card declined at point of sale. If these transactions are instantaneous why can't we elect to have the merchant decline the card if we don't have the money?

@juri squared: oh, but why should we make the banks pick? some banks charge the per item fee & then charge an additional per day charge (for each day you are insufficient). so, assuming your direct deposit doesn't come in for another week & that essential monday coffee put you in the red by $2, you'll see a $30 o/d fee + 7 days of $5 "insufficient funds on deposit" fees for a total of $65! for a $2 overdraft. YAY!

realistically, yes, your idea is the better one.

@AdolfElephunkey:

agreed.

I pay for EVERYTHING with my AMEX and it does nothing but reward me!

I know the greatest-to-least processing of transactions is deliberate, but I wonder about the other thing that drives me crazy about BOA. Any transaction made on a Friday, Saturday, Sunday OR Monday is considered 'pending' until Tuesday morning. If its all done by computer, why does it only work four nights a week?

@Dooley: I blame the OP...he should watch his purchases more closely. :)

Seriously though, if you normally have less than $1000 in your account and you notice that you have a lot of excess money it should probably raise a red flag.

@PDX909: True, but in this case it seems that the check had not yet cleared.

@choinski: Any transaction made on a Friday, Saturday, Sunday OR Monday is considered 'pending' until Tuesday morning. If its all done by computer, why does it only work four nights a week?

This will work to your benefit - if it takes longer to hit your account then there is more time to cover it...right?

Here is the problem that banks have - as soon as you overdraw your account you become one of a group of people who is exponentially more likely to cause a loss in the future. You become the banks best and worst customer. What they know about members of this class is that they don't want to issue any unsecured debt to this person, they know that this person is unlikely to have a large account balance or need "wealth management" services in the future, they know that this person is unlikely to be a mortgage candidate in the near future. In short, they know that the only way they are going to make money off people in this class is through fee income - so they really let them have it with fees. So what ends up happening is either people change their behavior and manage their account better or, if they are in a situation / mindset that will eventually cause a loss to the bank the overdraft fees exponentially inflate the amount that the person must provide to bring the account current - such that it causes the customer to "hit bottom" sooner. The result is that the banks losses are minimized - if you only have $300 what are you going to do with it - pay $300 in bank fees or pay your car payment? The bank would rather know you are in trouble in advance and run you off with a bunch of fees that it costs them nothing to write off than end up taking a larger loss on you when the house of cards really falls down.

@RandaPanda: Many banks call these convenience/courtesy overdrafts. Wouldn't it be nice if they were convenient for the customer and made the bank a little money?

@pupu:
Unless you have one of those particularly underhanded banks (like my old one, Fifth-Third) that charges what they like to call "anticipated overdraft fees".

Basically, if you have a pending transaction that WOULD put your balance in the negative, they'll charge you an overdraft fee immediately without waiting for it to actually post to your account. Even if you deposit enough cash (which posts to your account instantly)to cover the pending transaction, you'll still get hit with the fee.

I once discovered that I had a handful of small purchases pending that were going to put my account in negative balance because a check cleared I had forgotten about. Since I had no cash and there wasn't anyone I could borrow from, I went to one of those seedy payday loan places and got a $200 loan (minimum they would give me) and immediately deposited all of it to cover the handful of pending transactions (all purchases between $1 and $5). I still got charged a $39 "anticipated" overdraft fee for each transaction, so even though the charges were only enough to make my balance about -$10, I was hit with so many overdraft fees that, even with the $200 cash deposit, the bank claimed I owed them another $300 from fees alone, along with another $6 per day until I paid it. I called the manager and hashed it out with them, and the most they were willing to do was cut the fees in half, so I still had to pay another $150. :(

My new bank doesn't do this, thank God.

@choinski:
Banks will only process your transactions on days that all the other banks are open (that's 5 nights a week, not 4). Say you've got an account at Mega Bank with $1 in it. You deposit a check on Saturday at Mega Bank that is drawn on Micro Bank. Micro Bank isn't open until Monday, and won't give Mega Bank your funds until then.

Then you go out on the town Saturday night and use your debit card 5 times. If Mega Bank processed on Sunday, those transactions would overdraw your account. So it waits till Monday, posts your deposit first, then debits the card purchases.

Once again: Plastic is for large planned purchases, purchases where carrying cash is impractical, remote purchases, and "Oops! I'm out of cash" moments.

If you use plastic for everything, you WILL eventually have it bite you, when that happens, the expense and hassle will probably outweigh the previous convenience/rewards by a hefty margin. If the first time doesn't make this clear, the second or third (Doing the masochism tango!) ought to do it.

To the people who say "plastic for everything" is not a problem: You can chain-smoke like a forest fire and live to be a ripe old age, but no rational person will actually do it.

@MikeVx: I fail to see how using credit cards for the majority of purchases is a bad thing. I keep a few dollars on hand for that rare moment in which a store's machines are down or some stores don't take credit. But I just don't see how for day to day, even an impromptu (unplanned) purchase can ruin you.

35 bucks for a cup of coffey

smh

It's the reason I have 100 dollars cash on my person or home at all times. For small purchases, it makes no sense to use your debit card. Better to pay cash and forget about it.

check register are our friends.

@MikeVx: You know this is about checks/debit card purchases, not credit card purchases, right? I'm not really sure what your rant has to do with the article.

35 bucks for a cup of coffey.

It's the reason I have 100 dollars cash on my person or home at all times. For small purchases, it makes no sense to use your debit card. Better to pay and forget about it.

@B: oh it adds to the story. you slip up with a debit card and get hit with a 35 dollar fee. It's much better to pay cash for small things like newspaper, coffee, sandwich and a pack of gum.

I'm glad Corey got things largely taken care of, and although he was in the wrong, the fees should be more proportional regardless to the problem he created. I have an ongoing problem with Chase, they like to take cash I deposit before the end of the business day, post it to my account that day (including it appearing in my available balance"), allowing me to set up a payment for something with their bill pay service that evening, THEN when the sysyem does its balancing overnight the deposit shows as being after the bill pay I did & causes an overdraft with how they re-arrange debits & credits to cause/increase overdrafts. It has happened more than once & each time they have to correct it & refund me. Fortunately, I always keep the time stampted deposit slip a few days & knew that their bill pay system will not allow you to make a payment without sufficient available/cleared funds. I have learned to take screen shots as well when I am pressed to turn money around quickly in my account to pay a bill through them.

@pupu: wrong. they put a hold on your account and the amount is already considered debited, despite the "pending" status.

@unpolloloco:

With debit card transactions, you're looking at how much is in the account, and tracking the balance as it goes down to make sure it doesn't hit 0 (and result in overdrafts).

With credit card transactions, you're looking at how much you've charged to the account, and tracking the balance as it goes up, to make sure it doesn't hit your credit limit.

For me, I only keep enough money in the checking account tied to my debit card to pay bills (the rest of my money gets transferred to a savings account that earns decent interest).

For me, I would hit the bottom of my checking account before I would hit the top of my credit limit. But that's easy when your credit limit is ridiculous (20k).

/OTOH, if I transferred the money out of my savings account to my checking account, then I would hit the credit card limit long before bottoming out the checking account.

/YMMV

@CHIC NOIR: Its a good thing that you never run into a situation where cash gets tight and that one hundred gets used up... Wait, you can go to the bank and get some more, right?

@coren: "I don't think he should have gotten them refunded."

For Pete's sake, it's just a minor act of altruism on the part of BOA! THAT deserves opposition?

@CHIC NOIR: Or...use a credit card and don't get hit with a fee, assuming you can pay the bill off in full.

@Ichiro51: It's me posting a comment on a thread of a blog. If you want to classify that as opposition, sure, I oppose it, but I'd certainly call my opposition minor as well. He is getting rewarded for complaining about things that are his fault. Every person who does this makes it that much more unlikely that the next person down the chain (maybe someone who got screwed by rearranging debits, or some other practice) will get their problem solved.

@juri squared: And then on weekends when you can't fix things, you'll be down 70 for that same cup of coffee that'd otherwise be 35. Banks would probably skew towards weekend overdrafts then

@CHIC NOIR: This probably goes beyond the scope of the article but using cash to "pay and forget about it" is a really easy way to lose track of your budget. By taking out 100 in cash each month and not watching where it goes, you're easily wasting 1200 a year on take-out lunches and morning cups of coffee, without realizing just how much money you're spending.

@greggen: greggen, I wasn't attempting to flame. the 100 bucks for all of my small purchases. 10-20 for groceries, cab/bus fare, coffee, newspapers, play money, a drink or two, sandwich, few stamps, a pack of gum etc... For the most part, I try to keep my debit transactions down to checks and the few times I've run out of cash.

I know people who never carry cash and don't use a check register. When you combine those two, it's a bad situation waiting to happen. I've been there for 150 bucks in overdraft fees once. I've had overdrafts for as little as 18 cents, and 2 cents. I learned my lesson, I have better ways to blow my money versus just giving it away to the bank. I find that in making fewer debt transactions, I now have 1- 2 max overdraft fees per year.

@B: @b-

This probably goes beyond the scope of the article but using cash to "pay and forget about it" is a really easy way to lose track of your budget

That 100 is for me to do everything I need for two weeks besides pay bills. It's a part of my budget. 200 per month for groceries play money, etc... When it gone it's gone unless I want to borrow against next month.

Trust me; it's better than using a debt card for every purchase. I've been double charged on purchases I've made on my debt card. I don't want to waste my time talking to customer service nor do I want to go thru pages and pages of my checking account statement for 1,3 and 5 dollar purchases

This probably goes beyond the scope of the article but using cash to "pay and forget about it"
I don't think so. It makes it easier for him to keep track of his debt transactions.

BTW B, some people use the envelope method to keep track of cash. I don't because I admit I don't like fumbling thru a bunch of envelopes.

@greggen: Its a good thing that you never run into a situation where cash gets tight and that one hundred gets used up... Wait, you can go to the bank and get some more, right?
Do you use overdrafts to cover small purchases?

I know people who give the bank 100-200 per month in over draft fees.