If you haven’t noticed, banks (especially brick and mortar ones) are always looking for ways to squeeze a few more dollars out of their customers. They are consistently losing market share to online banks and are struggling to keep up.
My old bank (I now use ING and a credit union) used to put a balance of $1100 on my receipts when I had only $100 in my account. I asked the teller about it and she informed me that it was a new “service” they offered called a “courtesy overdraft loan.” So, if I wrote a $150 check and only actually had $100 in my account, they would clear the check rather than bouncing it. Which is nice, I guess. But what they did not mention is that they would charge me $30 each time I tapped into that credit.
I was disappointed with the bank because they advertised this money as your “available balance,” I inquired about it to find out the truth, but I am sure many people didn’t and fell victim to this sneaky policy.
Do yourself a favor and check to see if your bank is running a similar program. If they are, you can sign up for overdraft protection which will pull funds from your savings account rather than triggering a huge overdraft fee.
Not all banking institutions have this policy, most credit unions are not that money hungry and ING Direct has a much better overdraft policy as well.
Technorati Tags: overdraft, bank fees, online banking
{ 4 comments… read them below or add one }
Banks can be terrible! The funny thing is, our local credit union is the worst! We used to have an account there, but then they decided to charge $10 a month just for the privilege of walking through their doors and seeing someone in person. We dropped them like a hot potato and signed up with ING for our savings.
We moved our checking account to a regular bank and have done just fine there. But you always have to read the fine print.
@Lynnae
Wow, you are right – I would have been out the door as well!!
I have never heard of a bank or credit union with that policy, but I wouldn’t be surprised if we start seeing more of that in an effort to compete with the online banks. Time will tell…
This is how WellsFargo bank fees are working. I made a purchase the day before my deposit hit. PayPal informed me that the process on an e-check takes 3-5 days. Well, less than 24 hours later, WellsFargo processed the largest charges then swindled my account for the usual NSF fees. The agent offered 50% reversal of the fees and then told me to call back to have the rest of the fees reversed after talking to the merchant. The merchant reversed the fees and still after reimbursement from the merchant, WellFargo gives me this crock about something having to do with the merchant not returning the fees one at a time (which she had,) and because I accepted 50% of the courtesy reversal, as of two weeks ago, procedures were eradicated that allowed the remaining fees to be credited. The banks don’t care about their customers. When I needed to get my refund fast, it took three full days for the money to process to my account. When it comes to fees, the banks certainly can pilfer it in less than 24 hours. Ask WellFargo. They did it to me.
I have a good one for you! I have been with this bank about 10 years. In that 10 years they have refused me loans, treated me like I wasn’t worthy and screwed up my account. I am now in a big mess because I asked to have a hold put on my account after finding out there were charges I didn’t know where or who they were. They refused. I asked them to freeze my account and they refused. In the mean time they kept taking and returning checks. I have probably paid out over $900-1000 in the last 2-3 weeks. They finally froze my account so they said. I signed the papers on a wednesday at 2pm and between 7am and 2pm my account had changed again! Did you know they always put in the highest dollar checks first but take out the lowest first when overdrawn? What a crock! Nothing like using people to pad your business.