U.S. banks stand to collect $38.5 BILLION in overdraft fees

Overdraft fees are ridiculously high. That being said, folks need to understand the bank's policy of how they handle deposits vs. withdrawals. Folks need to understand a debit card is treated like a check in as much as funds are not generally verified and they are also withdrawn immediately. Also, don't overdraft your account. For the occasional screw up, banks tend to reverse the fees.

 

^^^Agreed. Fees are excessive but you're still an idiot if you overdraft.

 

I think it is pretty ridiculous that a bank charges such a large fee when it does not cost the bank anywhere near that much to reject a check.

On the other hand, I cannot gather any sympathy for the deadbeat that bounces a check. If you cannot keep track of your money, set up a linked savings account or line of credit. Better yet, just keep track of your money.

 

I agree consumers need to understand the banking system better, but the way it is designed is to catch consumers in overdraft. This is one more of those many "poor taxes" that people don't account for. The wealthy rarely have this problem.

There are two glaring issues that are down right criminal in the way they are used and they BOTH make up a huge sum of this number:

1) Collecting ODF's when businesses put a hold or reserve on money that isn't used. For example, gas stations and hotels. I understand putting the hold and i understand a person needs to get a ODF if that reserve is used, but they certainly shouldn't get one if that reserve is not used. This leads directly into the next issue;

2) Allowing the largest sum to deplete first, and then charging ODF's for the nickle and dime transactions.

This is not tricky banking practice, this is simply thievery. And I wouldn't doubt for a second there is plenty of lobbying to discouraging the government from stopping this practice.

 

I don't think banks do this, they don't overdraft till the hold is dropped and if a they get a receipt for a transaction, if no receipt when hold is dropped no charge.

just to give the bank's side of the story, they will say they don't want to reject your larger transactions because they tend to be more important things. just saying what they will say, when i worked for a bank they actually used to take the smaller transactions first but then changed it to the larger and that was their excuse.

 

The fact remains that regardless of which charge is taken out first, collectively, the user took out money they didn't have. If you have $400 in the bank you should not try to spend $500.

 

True, but if I have $400, deposit $100, and then spend $450, the bank should process the transactions in order. Process the deposit before the debit. Anything else is a business practice designed to charge fees unscrupulously.

 

So what about the guy that goes and deposits his paycheck, but it turns out the employer doesn't have any money in his account. The guy now pays a fee for depositing a bad check and gets hit with a NSF fee on transactions he made assuming the check would clear. This happens to a lot of people, and with small businesses. Those are the people that get screwed.

 

Easy fix. Don't spend more than you have. Is there such thing as personal responsibility anymore?

 

This. . I can attest to. . . They indeed do this


What's the difference between PAYDAY LOANS and LOANSHARKING?

Rocket River

 

There are plenty of folks who are in no way poor that overdraft.

 

i think he was being sarcastic

 

I haven't overdrafted, but I could easily see how it is possible with Bank of America. They way they handle deposits should be illegal.

I go to the bank at 8AM and give them $200 cash, I don't get credit for that money until the next day. My paycheck is direct deposited, yet when the 1st/15th falls on a Friday they don't give me credit for it until Monday.

 

Really?

I have Bank of America and I get credit for my direct deposits at 6pm the night before they are scheduled. So if the 15th is on a Sunday, I can spend my money Friday night, the 13th.

Although they did screw me into paying $350 in overdraft fees last year, and only refunded $200 of them even though they basically admit it was their fault. I'm just too lazy to switch banks over it, but I wanted to.

 

$25 overdraft fee doesn't seem out of line. A 4% increase to $26 doesn't sound like gauging. And I'm not overly surprised that 90% of the fees come from 10% of the accounts and that those accounts are from cash strapped customers with lower credit scores.

 

Yes, this is unfair. But I'm guessing most of these fees were not related to this type of nastiness, and more the "i can't balance my checkbook" stupidity.

 

90% of America was spending more then they had dude. Our whole society, and capitalism, is based on spending more then you have.

Without it - how many people could buy a car, a house, put kids through college? This is the craziest statement I've seen from ya.

I used credit cards to avoid spending bank cash when I was unemployed and young. Kept transferring balances to avoid interest - but still, a tough way to be and too many people are there.