Comments on: If I were a bank, here’s how I’d deal with overdraft fees http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 12 Feb 2012 18:46:58 +0000 hourly 1 http://wordpress.org/?v= By: AngelaM http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-123679 AngelaM Fri, 14 May 2010 03:11:30 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-123679 Andy, I'm completely with you on this one. Somewhat off topic, but does anyone know of a bank that clears deposits in a reasonable amount of time? Every direct deposit I receive doesn't show up until at least 2 business days after the company giving it posts it. Occasionally, it's a lot longer. Sometimes, the result is overdraft fees for exactly the reasons Andy mentions above. Direct deposit is supposed to be instant... is it not? Am I missing something? I've asked the bank about it repeatedly and they claim to put all direct deposits through immediately after they receive the request, but mine are consistently late. My former employer would put my paycheck through the 28th, to be paid the 31st. My co-workers deposits cleared by the 31st at the latest, but mine were always a day later. This was a continuous paycheck at a regular interval from the same exact source each time. I still can't wrap my brain around the 'why?' part of this. It's kind of hard to budget (especially with automatic payments, which are required for things like car insurance) if you have no idea when your bank will loosen their grip on your paycheck... "If I could find a bank whose sole purpose wasn’t finding a way to screw me every chance they get, I would be a loyal customer for life." <- QFT Andy, I’m completely with you on this one.

Somewhat off topic, but does anyone know of a bank that clears deposits in a reasonable amount of time?
Every direct deposit I receive doesn’t show up until at least 2 business days after the company giving it posts it. Occasionally, it’s a lot longer. Sometimes, the result is overdraft fees for exactly the reasons Andy mentions above. Direct deposit is supposed to be instant… is it not? Am I missing something? I’ve asked the bank about it repeatedly and they claim to put all direct deposits through immediately after they receive the request, but mine are consistently late. My former employer would put my paycheck through the 28th, to be paid the 31st. My co-workers deposits cleared by the 31st at the latest, but mine were always a day later. This was a continuous paycheck at a regular interval from the same exact source each time. I still can’t wrap my brain around the ‘why?’ part of this.

It’s kind of hard to budget (especially with automatic payments, which are required for things like car insurance) if you have no idea when your bank will loosen their grip on your paycheck…

“If I could find a bank whose sole purpose wasn’t finding a way to screw me every chance they get, I would be a loyal customer for life.” <- QFT

]]> By: Could it happen in America? « Wesabe: Your Money. Your Community. http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-119415 Could it happen in America? « Wesabe: Your Money. Your Community. Wed, 18 Nov 2009 03:27:17 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-119415 [...] is often an administrative error and start getting angry at being exploited.  Ramit Sethi has a post on the topic that is illustrative of common sense – read the first comment in response to [...] [...] is often an administrative error and start getting angry at being exploited.  Ramit Sethi has a post on the topic that is illustrative of common sense – read the first comment in response to [...]

]]> By: Marc http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-58553 Marc Fri, 11 Apr 2008 06:08:46 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-58553 Overdraft Fees! Banks make billions on this. I can get a better deal from my loan shark. I hate it I hate those BLOOD SUCKING bankers that invented it. Overdraft Fees! Banks make billions on this. I can get a better deal from my loan shark. I hate it I hate those BLOOD SUCKING bankers that invented it.

]]> By: Crystal http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-25293 Crystal Fri, 06 Jul 2007 19:21:23 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-25293 I hate overdraft fees myself! When I had forgotten about a check wandering around in space for over a month...it hit my account when I wasn't expecting it...and yes, you guessed it...overdraft fees. Except the bank didn't charge just one overdraft fee...the one for the check. Oh no...it cleared the check...and charged overdraft fees for the other 6 little charges I had put on my debit card. One soda cost me 36 dollars in fees. I called the bank to try to have them waived...even talked to the branch manager, and they refused. So I cancelled my overdraft protection. What are they going to do now? They'll be forced in the same situation to actually BOUNCE the ONE check...and charge me ONE FEE. awwww...the poor things. I hate overdraft fees myself! When I had forgotten about a check wandering around in space for over a month…it hit my account when I wasn’t expecting it…and yes, you guessed it…overdraft fees. Except the bank didn’t charge just one overdraft fee…the one for the check. Oh no…it cleared the check…and charged overdraft fees for the other 6 little charges I had put on my debit card. One soda cost me 36 dollars in fees. I called the bank to try to have them waived…even talked to the branch manager, and they refused. So I cancelled my overdraft protection. What are they going to do now? They’ll be forced in the same situation to actually BOUNCE the ONE check…and charge me ONE FEE. awwww…the poor things.

]]> By: Ramit Sethi http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-24058 Ramit Sethi Mon, 25 Jun 2007 17:33:38 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-24058 Woah -- why don't you call them? Woah — why don’t you call them?

]]> By: Lora http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-24055 Lora Mon, 25 Jun 2007 17:22:21 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-24055 Here is the way Wachovia has ruined my life; both financially and personally, with its overdraff fees and policies. I noticed a couple of weeks ago on my online statement that Wachovia had charged me $950 in overdraff fees for under $200 in overdrafts from my checking account from the beginning of this month; leaving my checking account depleted in $1,128. My paycheck that I have directly deposited into my checking account back on 6/15 covered this; however, leaving me with a plus sum of only $22.00. During May, Wachovia had charged me $250 in overdraft fees for $50-75 in overdrafts. This experience has really ruined and devastated me; both financially and personally. As a result, I am now unable to pay any of my bills -I am doing my best to stave off all of my creditors. I wrote an e-mail to Wachovia back on 6/15 demanding that they replace or credit the overdraft fees or I would go take my business to another bank. To this date, I have not heard from them; and to top this off, they have also shut down the use of my CheckCard - leading me this weekend to some embarrasing situations when I tried to use the card and it came back "declined". I have decided once and for all to end all business with Wachovia and open an account at a competing bank. Still, as I have said, Wachovia has ruined my life. Here is the way Wachovia has ruined my life; both financially and personally, with its overdraff fees and policies.

I noticed a couple of weeks ago on my online statement that Wachovia had charged me $950 in overdraff fees for under $200 in overdrafts from my checking account from the beginning of this month; leaving my checking account depleted in $1,128. My paycheck that I have directly deposited into my checking account back on 6/15 covered this; however, leaving me with a plus sum of only $22.00. During May, Wachovia had charged me $250 in overdraft fees for $50-75 in overdrafts.

This experience has really ruined and devastated me; both financially and personally. As a result, I am now unable to pay any of my bills -I am doing my best to stave off all of my creditors. I wrote an e-mail to Wachovia back on 6/15 demanding that they replace or credit the overdraft fees or I would go take my business to another bank. To this date, I have not heard from them; and to top this off, they have also shut down the use of my CheckCard – leading me this weekend to some embarrasing situations when I tried to use the card and it came back “declined”. I have decided once and for all to end all business with Wachovia and open an account at a competing bank. Still, as I have said, Wachovia has ruined my life.

]]> By: I Will Teach You To Be Rich » Negotiating out of bank fees part 2 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-18060 I Will Teach You To Be Rich » Negotiating out of bank fees part 2 Tue, 29 May 2007 17:49:23 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-18060 [...] If I were a bank, here’s how I’d deal with overdraft fees [...] [...] If I were a bank, here’s how I’d deal with overdraft fees [...]

]]> By: Eric http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-5388 Eric Tue, 20 Feb 2007 03:26:01 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-5388 I like overdraft fees...people that pay them cover the costs of my free account with lots of perks, free checks, credit card rewards, etc. There's a difference too between overdraft fees and a line of credit that is drawn down when you go below $0.00. I use this every once in a while when there is a difference of a day or two between bills and paychecks. I've never paid more than 50-60 cents for a few hundred bucks borrowed for a few days and paid right back. I like overdraft fees…people that pay them cover the costs of my free account with lots of perks, free checks, credit card rewards, etc.

There’s a difference too between overdraft fees and a line of credit that is drawn down when you go below $0.00. I use this every once in a while when there is a difference of a day or two between bills and paychecks. I’ve never paid more than 50-60 cents for a few hundred bucks borrowed for a few days and paid right back.

]]> By: Dave http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-4923 Dave Wed, 14 Feb 2007 22:24:06 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-4923 Having had a lot of difficult times, I regularly incurred the dreaded $35 overdraft fee on my Wachovia account. I tend to use my debit card for everything from paying utilities to buying a quick meal, so it was disheartening to see a #5 at taco bell cost forty bucks a pop. Even worse would be 5-6 transactions that get applied before a paycheck clears (I'm convinced this is a conspiracy by the banks), each costing $35. I'd be out several hundred dollars, on occasion. Here's what I did to hack the process: - Every paycheck, I pay all the bills that are due before the next paycheck, immediately. - When the bills are debited, I withdraw enough cash to last me for meals, gas, haircuts, whatever your little expenditures are that keep adding up, until the next paycheck plus a few days grace period This works well, since it's $35 whether it's a $400 overdraft or a $4 one. It minimizes the chance of paying 3-4 of those fees (really increasing the chance it'll happen again the second time). Plus, it's a fairly cheap interest rate (10% or so), compared to other short-term loans for those of us with bad credit. Ideally we get to a point where that trick becomes irrelevant because we have a nice cushion. But for the hard times, it worked like a charm, especially if you combine some thriftiness in the process. Even better, make a budget and instead of paying by debit everywhere, withdraw the exact cash amount you need for "out and about" expenses like these. It helps keep you on par with your budget, knowing that when the cash gets low it's all you have left. And when you're under-budget it makes you feel better for saving money. I think a big part of the problem is electronic funds. It makes it too easy to spend. Having had a lot of difficult times, I regularly incurred the dreaded $35 overdraft fee on my Wachovia account. I tend to use my debit card for everything from paying utilities to buying a quick meal, so it was disheartening to see a #5 at taco bell cost forty bucks a pop. Even worse would be 5-6 transactions that get applied before a paycheck clears (I’m convinced this is a conspiracy by the banks), each costing $35. I’d be out several hundred dollars, on occasion.

Here’s what I did to hack the process:
- Every paycheck, I pay all the bills that are due before the next paycheck, immediately.
- When the bills are debited, I withdraw enough cash to last me for meals, gas, haircuts, whatever your little expenditures are that keep adding up, until the next paycheck plus a few days grace period

This works well, since it’s $35 whether it’s a $400 overdraft or a $4 one. It minimizes the chance of paying 3-4 of those fees (really increasing the chance it’ll happen again the second time). Plus, it’s a fairly cheap interest rate (10% or so), compared to other short-term loans for those of us with bad credit.

Ideally we get to a point where that trick becomes irrelevant because we have a nice cushion. But for the hard times, it worked like a charm, especially if you combine some thriftiness in the process.

Even better, make a budget and instead of paying by debit everywhere, withdraw the exact cash amount you need for “out and about” expenses like these. It helps keep you on par with your budget, knowing that when the cash gets low it’s all you have left. And when you’re under-budget it makes you feel better for saving money.

I think a big part of the problem is electronic funds. It makes it too easy to spend.

]]> By: Rob Rubin http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees/#comment-4751 Rob Rubin Mon, 12 Feb 2007 19:56:13 +0000 http://www.iwillteachyoutoberich.com/blog/if-i-were-a-bank-heres-how-id-deal-with-overdraft-fees#comment-4751 I agree with how you feel about overdraft fees. I think we should help wean banks off of PUNITIVE fees. How (I cut and pasted this from my blog)? 1. Avoid doing anything that might incur a fee; 2. Pay attention your bank statements to find fees; 3. Call and complain — try to get fees waived (remember, the squeaky wheel gets the grease); 4. Switch banks if your’s sucks. I'm working on a post that summarizes all the different fees banks charge and how to avoid them. Ramit, keep up the good work. I agree with how you feel about overdraft fees. I think we should help wean banks off of PUNITIVE fees. How (I cut and pasted this from my blog)?
1. Avoid doing anything that might incur a fee;
2. Pay attention your bank statements to find fees;
3. Call and complain — try to get fees waived (remember, the squeaky wheel gets the grease);
4. Switch banks if your’s sucks.

I’m working on a post that summarizes all the different fees banks charge and how to avoid them.

Ramit, keep up the good work.

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