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Ridiculous overdraft fees
MHYoshimitzu
Registered User regular
Registered User regular
I've had an account with a credit union exclusive to my area for over four years. Now, I've had hard weeks where I spent as much as $30 over what my account had in it, only to run to the CU and have them tell me that everything was fine, and that my paycheck I just deposited went through, so there were no issues. I've overdrafted maybe a dozen times in the past four years, and never once have I been charged.
Until Thursday. I took my girlfriend out to dinner and offered to pay the bill. At $40, I figured I still had about $100 left in my account which would last until the next week, when I'd be paid again. I went through Friday, Saturday, Sunday, Monday, and today without even checking my account.
Today, I come home from school to see a letter on my desk. It tells me that my $40 bill (from 4/3, yet the letter was delivered today) was not covered under my checking account and that a $27 overdraft fee was added to my account, putting me about $-70 in the hole. Frantically, I checked my account to see what else was charged.
$-434 in the hole. I paid for all my lunches this week with my debit card, so every single transaction was charged an additional $27. Unbelievable.
There is no way in hell I can pay this on my own, and I'm getting the feeling I'm fucked. I plan on talking to the credit union tomorrow, but what are my options at this point?
Until Thursday. I took my girlfriend out to dinner and offered to pay the bill. At $40, I figured I still had about $100 left in my account which would last until the next week, when I'd be paid again. I went through Friday, Saturday, Sunday, Monday, and today without even checking my account.
Today, I come home from school to see a letter on my desk. It tells me that my $40 bill (from 4/3, yet the letter was delivered today) was not covered under my checking account and that a $27 overdraft fee was added to my account, putting me about $-70 in the hole. Frantically, I checked my account to see what else was charged.
$-434 in the hole. I paid for all my lunches this week with my debit card, so every single transaction was charged an additional $27. Unbelievable.
There is no way in hell I can pay this on my own, and I'm getting the feeling I'm fucked. I plan on talking to the credit union tomorrow, but what are my options at this point?
MHYoshimitzu on
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Set up overdraft protection so it doesn't happen again, and keep better track of your money going forward.
If you're low on cash in your account, just use cash.
The overdraft protection I'm talking about is where you link your checking account to either your savings account or a credit card you have with the same bank, and if you overdraw the excess funds come out of the secondary account. I've never had a fee for that. Maybe I have just always had really cool banks?
maybe it was a fee small enough that you didn't notice? it's usually like a 5 dollar service fee.
My bank specifically charges $10 for that. Each time.
But they charge like $30 for an overdraft.
So it's a reacharound.
This. This is SOP for nearly all banks, though obviously there are exceptions. Your recourse right now is begging, and thank whatever god you believe in if they take off even half of those fees.
How about you no longer rely on bank oversights?
This is exactly why debit cards are lame as hell. All the risk of using a check, none of the reward of using a credit card.
I, being the idiot that I am, listened to them when they told me that I shouldn't have a credit card since they will lend me money if I am in need. I used to keep a very tight leash on what I spent, but in addition to being really freaking busy in school and this idea that money is always available to borrow has led to a false sense of security which has now come crashing down.
Yeah, it's definitely a life lesson all right. And I definitely don't have the money to pay this, so someone is going to have to bail me out or I'm in legal trouble.
...hey, it's better than nothing.
edit: since it seems they have been cutting you a break on overdrafting a bunch of other times, they may not do this.
but they're listening to every word I say
I say the same thing every time this kind of thread pops up, but for the love of god, get one of those accounting programs. I use quicken, and I'm pretty sure one of their versions is free now, and others can probably recommend other free programs.
Once you get into the habit, you'll always know how much you have.
That's how I got my overdrafts refunded (only $70 for me though). They tend to be more caring when they smell money.
Seconded.
As a bonus, if you take the time to categorize your spending (takes a while at first, but becomes second nature soon after) you'll be able to tell what you're wasting all your money on.
I guess Quicken Online is free now, but I've not used it.
Especially because it gets you out of the feeling of "ooh, I got a paycheck, that's spending money!" since right from the beginning of the month you know exactly how much you can really spend.
Of course with the banks in the state they're in right now, there's no way you're getting one with a reasonable rate. But get one and always pay it off - it'll help a lot later in life.
You build great credit but at the same time you have a bit of a cushion in case you overspend.
I guess I have a sweet ass bank then!
In the meantime, can I turn the thread over to discussion of credit cards? Obviously, I don't have the slightest idea about what companies and rates are considered good in this economy. Other than paying off a small car loan, I have no credit to speak of, so I don't know if that will bar me from applying anywhere.
Not unless you have the restraint not to.
I don't know of any bank that will decline your charge on your debit card for lack of funds. Though I'm sure a couple may exist. Nearly every last bank will happily run charge after charge through, tacking on $25+ for themselves.
The point of using a debit card is to spend cash out of your checking account without having to be the douchebag who writes checks everywhere you go.
Also, everyone's suggestion on a credit card is really good, I mean, that basically sounds like what you'd need it for and not starting to build your credit is kind of shortsighted. My parents practically threw me into getting a credit card as soon as I could apply get one to start building credit (and after a lot of reinforcement lectures with the theme "you must never ever use it for money you don't have").
For credit cards you probably won't be able to get anything really special right at the start, but if you go to their websites they have applications you can fill out. Discover will give you a decent starting card and let you get some cash back -- I believe Chase, American Express, and Citibank are also all companies that recruits for students with no credit history on campuses too.
Whatever you do, don't start by getting a credit card from a department/mall store like Gap or Macy's. Getting those cards actually lowers your credit score, even if you pay it off regularly.
Credit cards only fuck you if you're not paying attention. It's still you buying stuff, not some random person (and if it is a random person there's a hell of a lot more protection on a CC compared to any other form of payment, barring cash). If you're spending too much, a credit card won't fuck you over for something like 1.5 months, at which point you'll be OK -- you can account for it.
If I could lime this any harder I would. If you are constantly facing the threat of overdraft charges because you are always low on your account AND you are responsible with money get a credit card and start using it for these purchases and paying the balance off at the end of every month. You will avoid all this hassle with overdraft shit. Don't worry about the interest rate if you are paying it off at the end of every month, you will not be affected by that. And avoid cards with annual fees!
I would rather my debit card be declined than to overdraft. It simply exacerbates your financial problem. I would rather my card be declined and I immediately know something is going on and I can move faster to fix it. With overdraft protection you could go for a weekend without ever knowing and on monday you're in serious shit. It is the equivalent of financial racketeering.
I truly feel your pain and I wish you the best of luck.
Shogun Streams Vidya
They will usually allow you small purchases, but if you try to buy a $500 item and only have $50 in the bank, it will be declined. It's a dick move, but avoidable.
Maybe, maybe not. As an irresponsible 19-year-old, I wanted to buy a new computer right then but wouldn't have the money for two weeks. So I went ahead and just bought the $400 computer despite having like $20 in my account...I figured the additional $30 or so was worth it, and I didn't have a credit card. It went through just fine.
it's not exactly legit either. They essentially force you to take a small loan with an OUTRAGEOUS interest rate whenever you overdraft. and they also time what hits your account first. If you wrote a check for $200, and 5 small transactions for $5 each, and you have $199 in your account, you'll get hit for every single one of those transactions b/c the $200 charge hits first. in my experience, there is no rhyme or reason to "when" these charges hit, they say everything that hit that day was posted, but i think they hang on to actually posting transactions until they can hit you for a whole bunch at once, potentially maximizing the fees they get. I think lawmakers are trying to put some legislation in to regulate this. I think currently there is no way to opt out of this "service" that banks provide.
overdraft protection is a bit a screwjob as well. Long ago, when i was in a bit of dire straights, i had overdraft protection linked to my CC which was nearly maxed out. so they hit my credit card when i overdrafted, charged me the $10 fee to transfer, and in doing so, overdrew my CC. So they hit me with ANOTHER $35 fee on that. granted, i was a dumbass back then, but banks are really taking advantage of people that are strapped.
PS good luck with the bank, since they let so many transactions hit, you might be able to get some sympathy. It depends on the CSR you get really. Just be nice, and tell them what's going on. i know big banks do this, but i wouldn't think credit unions would.
Still at school, passing time until the train. I wonder if I can convince my parents to let me get a card now. It's not really their decision, but since they are bailing me out of this, I feel obligated to listen to them somewhat. But honestly, it's not like they're going to be paying for my rent when I get an apartment, so the longer I wait, the more I am screwed.
get one, but like everyone said, only use it for what you can pay off that month. it's really none of their business unless you get yourself in another situation. i got a card when i was in college before i really knew anything about debt. I got in over my head, but it sounds like you have already learned your lesson.
Wow, that is crazy.
What they do here is hit you with fees from overdrafted automated bill payments.
If you have your car insurance coming out on the 18th and you happen to be a little short, they won't just refuse the transaction, they will attempt to make it go through.
It fails of course, and you are hit with Insufficient Fund fees. Then they try again. And again.
Usually 3 or 4 times. You will get hit with 80 dollars in fees.
It's still pretty fucking stupid, and there is nothing you can do (aside from having money, don't argue it).
My bank goes all the way to -$750
If they won't reduce or waive the fees then you may have to resort to threats. Not "I know where you live" or anything like that, but tell them you've been a loyal customer for four years and if they don't do something about this they will lose your business. Tell them you were just thinking of getting a credit card with them but if they can't make this right you will be paying off your fees and never banking with them again. Hopefully they will realize having you keep your money with them will do them better in the long run than just fucking you in the short term.
Even worse, I found my Dad's name was still tied to the account, so this affects him as well. This was originally because when I activated the account, I was 17 and unable to start an account on my own. He's going to have his name taken off the account, but it really blows since we're doing a lot of renovations right now and this may end up affecting how long those renovations take financially speaking.
Anyway, he took care of it. He gave me $600 and basically told me to "never do it again." So I'm going to start recording all my finances and stuff starting today. Someone mentioned Quicken, are there any other recommendations?