Punchinello’s Chronicles

October 5, 2009

Banks and ATM Overdraft Fees

Filed under: Foolish Rants — Punchinello @ 4:31 pm
Tags: , ,

You’ve probably run across articles about how we little people get screwed up by big corporate banks. The thing that particularly bothers me is that we give the bank money to hold and they give us almost nothing in interest. They lend our money out for many times more than they pay us. Okay, but along the way we get hit will all sorts of fees and unexpected problems. In particular, the overdraft charges you discover when you use your debit card.

A friend of mine has a PayPal debit card, done entirely online. When they use that card at a store and there isn’t enough money in the account, the card is declined. They may only be short a few cents, but PayPal…somehow…has the computer technology to instantly evaluate the card number, purchase amount, and the account balance. No money, too bad! Declined!

Well, that’s not how local banks work. If I use my debit card and don’t have enough money in the account, the bank will happily cover up to around $1,000 as a “courtesy” to me, their customer. Unfortunately, they’ll charge a “courtesy” fee of $32 per transaction per day. So, for example, I screw up and forget that I have only $100 in my account. I spend $80 on something, leaving $20.

I’m out and about, and charge $21 to my account. You would THINK that the bank would decline the purchase for insufficient funds. Nope. They give me the dollar. They also tally up a $32 fee. A few minutes later, I’m at another store and go to spend $4.95 for something. Once again, they pass the transaction and add another $32 fee. So now I’m up to $64 in fees, all for spending $5.95 that I’d lost track of.

The next day, the bank types up a piece of paper to let me know I’ve overdrawn my account and puts the paper in the mail. Of course I won’t receive that piece of paper for several days. Banks don’t use email, apparently. So Day 2, I haven’t made good on the overdraft I didn’t know about, and I get charged an addition $64 in fees. Now I’m up to $128 in fees for a $5.95 overdraft.

It only takes a couple of days and suddenly I’m in hock to the bank for hundreds of dollars. THEN I get the notification in the mail, in an envelope, delivered by the US Postal Service.

I went to the bank to tell them I love embarrassment! I thrive on it, going into paroxysms of joy when I hear the words, “I’m sorry sir, but your card has been declined!” I love that stuff! I don’t want the bank to offer me any courtesies! I don’t want the bank to pay money for me that I don’t have. I want them to halt, cease, stop, desist, and not-do-that-stuff anymore. With friends like the bank, I sure don’t need enemies!

Well, it turns out the technology just makes it…impossible!

“Who knows,” the nice lady at the bank told me. “Our computer could be down, it could be very late, or all sorts of things could go wrong. That’s why your debit card agreement says that the customer is responsible for knowing and maintaining their account balance properly.”

Hm…I think my parents taught me that, long ago. I’m supposed to be responsible, balance my checkbook each day, and know exactly how much money I have in my own account. That’s true. I get it. I agree. And by golly, it’s the mature and adult kind of thing to do.

But the technology isn’t possible?

In a world where hundreds of millions of dollars can transfer across thousands of connections, in and out of banks around the world, they can’t keep track of five bucks? How come PayPal can do this, and no other bank in existence can match that benchmark?

Being that I’m somewhat suspicious of institutions, I think I may have a thought. Now I know this will sound impossible, but hear me out. Just suppose the banks actually have a POLICY to let forgetful customers over-charge their debit cards? Ridiculous, you say? I know…it can’t be true, but we’re just speculating.

What if banks know that lots of us make mistakes on our balances. They know that we sometimes try to spend more money than we happen to have. They tell us that technological complexities make it impossible for them to help us out by giving us a timely warning. And they can charge us $32 per transaction per day for that “glitch” in the electronic universe!

Let’s also suppose that banks would prefer it if nobody used cash anymore. They want everyone to use electronic money for some strange reason. Maybe it’s because they don’t have any actual cash, but there are lots of numbers lying around that nobody’s using. And suppose that without a credit or debit card, you can’t really function anymore. I know, it’s ridiculous, but let’s just suppose.

Now I know some of you will be thinking I could get a line of credit as overdraft protection. Or I could tie my checking account to my savings account and automatically cover debits to the checking account with money from savings. Hah! Turns out there’s a fee for that too! Not nearly as large, but a fee nonetheless. Why can’t they just say no? Why can’t they just decline the card and let me deal with it?

Seems to me I read somewhere recently, that banks are taking in several billions of dollars per year with these kinds of courtesy charges. And, by gosh, there’s nothing anyone can do about it. The technology just simply isn’t up to the task of declining a debit card. A credit card, yes. They can decline that, but not a debit card. Sorry…just impossible. Maybe it’s because they can’t charge interest on debit cards? Who knows. It’s a mystery!

Oh well, I guess I’ll have to be more mature and adult about keeping track to the penny of how much money I have in the bank. It’s not that hard, since I only have around $3.87 at the moment. But for SURE, I’m gonna keep an eye on that money! Wouldn’t want to accidentally spend 40-cents that I don’t have, right? No siree!



  1. […] See original here:  Banks and ATM Overdraft Fees […]

    Pingback by Banks and ATM Overdraft Fees — October 5, 2009 @ 4:43 pm | Reply

  2. […] Banks and ATM Overdraft Fees Categories: Technology Tags: almost-nothing, bank, big-corporate, charges-you, debit-card, […]

    Pingback by Banks and ATM Overdraft Fees | Hot Trendz — October 5, 2009 @ 4:56 pm | Reply

  3. There’s a new credit card out to remind you not to use the other credit cards in your wallet.

    Comment by Gibson Carothers — October 5, 2009 @ 6:40 pm | Reply

  4. […] Read the original here: Banks and ATM Overdraft Fees […]

    Pingback by Banks and ATM Overdraft Fees Match Web — October 5, 2009 @ 6:43 pm | Reply

  5. […] bothers me is that we provide the slope money to stop and they provide … Original post: Banks and machine Overdraft Fees « Punchinello's Chronicles Posted in Banking, Uncategorized | Tags: a-bag-and, banking-fees, clerks, debit-cards-, […]

    Pingback by Banks and ATM Overdraft Fees « Punchinello's Chronicles | Atm up date today — October 5, 2009 @ 9:49 pm | Reply

  6. […] the card is declined. They may only be short a few cents, but PayPal…somehow…has the … Go to Source Related Posts:Debit Card Overdraft Fees Fuel Public Outcry – Denise RichardsonBB&T changes […]

    Pingback by Paying On Time - Credit Cards » Banks and ATM Overdraft Fees « Punchinello's Chronicles — October 5, 2009 @ 10:00 pm | Reply

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