Oh my gosh! This exact same thing happened to me two weeks ago at TD Bank...except I was charged $175 in overdraft fees. They posted the debits to my account before the deposit, even though all of the transactions occurred on the same day and there was sufficient money in my account to cover all but one transaction (which would have put my account $2.94 negative)...unfortunately that was the biggest debit.
The manager explained that they process debits not in the order that you made them, but from largest dollar amount to smallest, as a "courtesy" to the customers, because they assume the largest amounts are the most important. Thus, every transaction that posted after that one large one was an overdraw, never mind that I had plenty of money to cover them when I actually made the transaction. They would not budge on removing/amending the fees.
I, too, ended up closing my account on the spot and walking down the street to Citizen's Bank...and they are great and actually I have a much better deal there than I had at TD Bank in the first place (Free checks! Bonuses for paying bills online! No ATM fees!).
"Old pantyhose are great for making "flour whompers". Fill the toe with about 3/4th cup of flour, tie a knot just above the flour and cut off the leg (also works with knee highs)."
I would never fill old panty hose with anything especially food items such as flour. This is f'ing gross. In fact using old panty hose for anything other than wearing and tossing them in the trash is kind of sick.
You do make a few good points about non-sense practices of banks - showing you a different balance than what is actually available and not posting deposits on weekends.
However, as responsible adults, we should all take the time to either balance our accounts (it's OUR money = it's OUR responsibility) or be sure there is enough money in the accounts before we spend. This is no different from when our parents parents had to keep track of everything with a paper ledger to ensure they had the money in the account. Yes, banks charge disgusting fees when you screw up, but it is actually up to you to handle your own money, not the bank to make sure you are being responsible - they just punish you when you are not responsible as strict parents would.
I wish people would quit using banks as a scapegoat for their own irresponsibility.
When I started doing Internet DJ work, I needed a pop filter. I used my (now ex) girlfriend's old pantyhose, stretched them out using a circlet bought at a craft store, trimmed off the excess cloth, and held it up using a pair of helping hands (a heavy base with two alligator clips used for hobbies). Now I had my very own pop filter. When speaking and using heavy consonants like "p", "ck", "t" and so fourth, the pop filter filters out the heavy breaths when those consonants are spoken.
There is a lot about banking practices that need to change, especially in the age of near-instant electronic transfer. Your employer, for example, should be offering you direct deposit. In turn, his bank should be doing its best to offer your employer direct deposit abilities as part of the corporate bank account and tie that to whatever accounting software your employer uses.
The banking system at this point relies upon a mix of the old and just enough of the new to give banks an advantage over their customers. They're run less like the banks of yore and more like rackets. The fact that fees are a profit stream proves my point. It's organized crime, or a lot like it.
I had a similar issue with a, get this, local credit union. The process disgusted and annoyed me. On top of their horrible hours of operation, they had the unmitigated gall to charge me all types of fees based on transactions literally minutes apart. I had paid for my car note on Friday and sent an auto transfer from ING on Thursday. It got there on Monday, the same day the car payment came out. According to my online statement, the credit came in minutes before the debit. I still got charged the "Overdraft fee". I have a new account now and am so glad about it.
When I closed my old CU account, the CSR had the nerve to ask me, "Why are you closing your account?" I nearly told her, but thought better of it and just laughed.
All banks do *not* do this; or at least, not all financial institutions. I have banking at a credit union (EECU) for roughly 20 years. I'm fortunate in that my wife and I are no longer living close to the edge of our means, but even when we were we did not recieve this kind of treatment.
I'm confused... Transactions were made over the weekend knowing there wasn't enough money in the account, and then a check was hurriedly deposited Monday morning in the hopes it would clear before the debits went through.
BUT if the transactions had been handled in order, then wouldn't the bank have been in the right to levy the fees? They did, after all, overdraw their account.
I'm not defending the bank, but I don't think people can expect to beat them at their own game.
I really enjoyed this post.In particular your comment about working hard and playing hard struck a chord with me. I love it when I've put my all into work and then at the weekend being able to kickback and relax with that great feeling of knowing I have done the best that I can.
Times have changed and you don't want to bite off way more than you can chew. Everybody's job is potentially on shaky grounds, this is how you think even if your job is not this way. You've got to play your finances very safe and have a plan to get out of debt versus gain debt.
I agree with the post about NOT donating hair to Locks of Love. Very little of what they do is actually given to children in need. If someone would like to donate their hair to a child in need, please consider Wigs For Kids at www.wigsforkids.org. This organization was established by a fellow who wanted to help his own niece. Everything they do is for the kids, and the wigs are free to those who need them.
Years ago, my bank offered me free overdraft protection. If I overdraw, it transfers $200 into my checking account, which has a daily interest rate, plus a $2.00 fee. As long as I catch this in a few days, I can transfer money back to pay off the overdraft fund, and only be out the $2.00 fee plus a little bit in interest.
I don't need it often, but when I do, it saves me a lot of money and headache.
Our bank started doing these kinds of things. Of course they didn't notify anyone of the change in practices. They must have raked in a big pile of cash as customers discovered the new creative accounting.
Our bank also no longer offers overdraft protection or the ability to tie your saving account to your checking account to automatically move money to cover. The fact that they had these tools to avoid overdrafts and removed them is even more sleazy when combined with the creative accounting to create more overdraft fees.
We have started moving some of our money over to an ING account. At least they have a sane overdraft policy of just charging you a flat interest rate on the funds your borrowing. IIRC the rate was 5%.
Thank you so much for the opportunity to do a guest post on your wonderful blog! I hope your readers will enjoy it much and that I will be able to do more guest posts for you in the future as you require them :)
I believe some of the recent bank legislation will limit 1 aspect of this.
Banks will process all debits against your account before any credits. So you make a deposit at 8 am into your account in anticipation of several debits that day. At the end of the day - they process all the debits before the credit. Even though the credit was there before the debits.
Sneaky....
The fact is - most banks will do as much as they can legally to try to force you into fees. The fees are so incredibly lucrative and profitable. I have an automatic line of credit attached to my checking account for just this reason. I'd rather pay $1 minimum in interest than $50 dollars in fees. I also try to bill as many automatic payments as I can to credit cards so I can manage cash flow. Works well if you pay your cards off in full every month. Not so good if you carry a balance.
This was a poor example... You should always have a handle on your accounts and know approximately how much you have in cash... AND attach a credit line to your account if you normally hold a low balance...
If you withdrawl from an ATM that is NOT YOUR BANK, that bank will not always have an accurate balance of your account. If your treading a fine line on your checking balance, and you post 3 transactions without a high enough balance to cover it, why shouldnt a bank charge you 3 transaction fees for the 3 items you cannot cover??
Now, $30 is VERY steep, and i agree with that... If they charged you $5 per transaction you overdraw, i would be telling you to stop complaining... Fee structures are horrible, and Bank of America is the only company that sucks at the way their checks clear..."Highest first clears instead of in order of how they are presented." But, again, you should know your balance... If you cant afford it, dont buy it, or place all your purchases on a credit card and cut one check per month...
Maybe my calculations are off but I think a bank should charge a fee no more than the amount of the overdraft. Perhaps they could behave like my local bank and call (or automatically email) to give you a chance to deposit funds.
We all want to unlock our DVD players, but Paul said he used a database to find the code for his player. Go search the database. And if yours isn't in there, chances are he doesn't know either!
Cat makes a great suggestion in putting the majority of purchases on a credit card that way you have less transactions coming through your checking account as a way to avoid possible overdrafts. Another thing I wish to point out, as being a former employee of Citizen's Bank, I can assure you that their overdraft policy is no better, with the exception that they do process credits before debits.
"The only way to avoid these overdraft fees is join a bank which doesn't have these."
Respectfully, I must disagree. There is one other way to avoid these overdraft fees, don't play roulette with your bank transactions in the first place.
Without defending bank practices, I can only say that knowing banks uniformly do this sort of thing, and given that knowing exactly how posts and drafts work "under the hood" is often a mystery, my only option is to change my behavior so that I don't encounter fees.
My changes include using (and paying off) a credit card every month for 95% of my transactions, and ensuring that I keep a cushion in my checking account so when I withdraw cash I know what's in there. I don't have a ton of transactions on my bank account (they're on my credit card) so I don't have multiple opportunities to overdraft, and I have the one main transaction where I pay off my credit card each month with my bank account. It's a large number, I know when it leaves the account, and what I'll have left afterward.
Every time I come across a story like this, inevitably there is a Puritan apologist for the banks somewhere in the comments. That's the pathetic part. This is the internet age. Except for paper checks that many times still travel by gasoline and truck, there is no excuse why your balance shouldn't be accurate to the penny. Banks don't want you to know your balance because they want to screw you. Yes, Puritan Ethic apologists, we could keep a register as we did in the old days, but why, especially if we never write paper checks?
Do yourselves a favor. Stop doing business with banks altogether. If you can, use USAA. Otherwise, use a credit union.
I so want the banks to be punished. Writing nasty letters just doesn't feel enough. I want them to fail. In my idealist's mind, we could return to a small nation agrarian ethic and bulldoze Wall Street. They just had their most profitable year ever while we suffer. Something isn't right.
I tried UserTester a while back. I was approved, but I had an older computer at the time and it didn't work well with their software. I think I'll give it a shot again.
Oh my gosh! This exact same thing happened to me two weeks ago at TD Bank...except I was charged $175 in overdraft fees. They posted the debits to my account before the deposit, even though all of the transactions occurred on the same day and there was sufficient money in my account to cover all but one transaction (which would have put my account $2.94 negative)...unfortunately that was the biggest debit.
The manager explained that they process debits not in the order that you made them, but from largest dollar amount to smallest, as a "courtesy" to the customers, because they assume the largest amounts are the most important. Thus, every transaction that posted after that one large one was an overdraw, never mind that I had plenty of money to cover them when I actually made the transaction. They would not budge on removing/amending the fees.
I, too, ended up closing my account on the spot and walking down the street to Citizen's Bank...and they are great and actually I have a much better deal there than I had at TD Bank in the first place (Free checks! Bonuses for paying bills online! No ATM fees!).
"Work Hard, Play Hard" sums up my philosophy!
"Old pantyhose are great for making "flour whompers". Fill the toe with about 3/4th cup of flour, tie a knot just above the flour and cut off the leg (also works with knee highs)."
I would never fill old panty hose with anything especially food items such as flour. This is f'ing gross. In fact using old panty hose for anything other than wearing and tossing them in the trash is kind of sick.
You do make a few good points about non-sense practices of banks - showing you a different balance than what is actually available and not posting deposits on weekends.
However, as responsible adults, we should all take the time to either balance our accounts (it's OUR money = it's OUR responsibility) or be sure there is enough money in the accounts before we spend. This is no different from when our parents parents had to keep track of everything with a paper ledger to ensure they had the money in the account. Yes, banks charge disgusting fees when you screw up, but it is actually up to you to handle your own money, not the bank to make sure you are being responsible - they just punish you when you are not responsible as strict parents would.
I wish people would quit using banks as a scapegoat for their own irresponsibility.
When I started doing Internet DJ work, I needed a pop filter. I used my (now ex) girlfriend's old pantyhose, stretched them out using a circlet bought at a craft store, trimmed off the excess cloth, and held it up using a pair of helping hands (a heavy base with two alligator clips used for hobbies). Now I had my very own pop filter. When speaking and using heavy consonants like "p", "ck", "t" and so fourth, the pop filter filters out the heavy breaths when those consonants are spoken.
They'll do the same to you if you're not careful.
There is a lot about banking practices that need to change, especially in the age of near-instant electronic transfer. Your employer, for example, should be offering you direct deposit. In turn, his bank should be doing its best to offer your employer direct deposit abilities as part of the corporate bank account and tie that to whatever accounting software your employer uses.
The banking system at this point relies upon a mix of the old and just enough of the new to give banks an advantage over their customers. They're run less like the banks of yore and more like rackets. The fact that fees are a profit stream proves my point. It's organized crime, or a lot like it.
I had a similar issue with a, get this, local credit union. The process disgusted and annoyed me. On top of their horrible hours of operation, they had the unmitigated gall to charge me all types of fees based on transactions literally minutes apart. I had paid for my car note on Friday and sent an auto transfer from ING on Thursday. It got there on Monday, the same day the car payment came out. According to my online statement, the credit came in minutes before the debit. I still got charged the "Overdraft fee". I have a new account now and am so glad about it.
When I closed my old CU account, the CSR had the nerve to ask me, "Why are you closing your account?" I nearly told her, but thought better of it and just laughed.
All banks do *not* do this; or at least, not all financial institutions. I have banking at a credit union (EECU) for roughly 20 years. I'm fortunate in that my wife and I are no longer living close to the edge of our means, but even when we were we did not recieve this kind of treatment.
I strongly recommend looking into credit unions.
I'm confused... Transactions were made over the weekend knowing there wasn't enough money in the account, and then a check was hurriedly deposited Monday morning in the hopes it would clear before the debits went through.
BUT if the transactions had been handled in order, then wouldn't the bank have been in the right to levy the fees? They did, after all, overdraw their account.
I'm not defending the bank, but I don't think people can expect to beat them at their own game.
Hi Diggy,
I really enjoyed this post.In particular your comment about working hard and playing hard struck a chord with me. I love it when I've put my all into work and then at the weekend being able to kickback and relax with that great feeling of knowing I have done the best that I can.
It is very fulfilling and satisfying.
Thank you for a great post.
Times have changed and you don't want to bite off way more than you can chew. Everybody's job is potentially on shaky grounds, this is how you think even if your job is not this way. You've got to play your finances very safe and have a plan to get out of debt versus gain debt.
I use old panty hose to make my own filter material for aquariums. Saves me loads of money every year.
I agree with the post about NOT donating hair to Locks of Love. Very little of what they do is actually given to children in need. If someone would like to donate their hair to a child in need, please consider Wigs For Kids at www.wigsforkids.org. This organization was established by a fellow who wanted to help his own niece. Everything they do is for the kids, and the wigs are free to those who need them.
It was a pleasure working with you! Thanks for your contribution :)
Linsey Knerl
Years ago, my bank offered me free overdraft protection. If I overdraw, it transfers $200 into my checking account, which has a daily interest rate, plus a $2.00 fee. As long as I catch this in a few days, I can transfer money back to pay off the overdraft fund, and only be out the $2.00 fee plus a little bit in interest.
I don't need it often, but when I do, it saves me a lot of money and headache.
Our bank started doing these kinds of things. Of course they didn't notify anyone of the change in practices. They must have raked in a big pile of cash as customers discovered the new creative accounting.
Our bank also no longer offers overdraft protection or the ability to tie your saving account to your checking account to automatically move money to cover. The fact that they had these tools to avoid overdrafts and removed them is even more sleazy when combined with the creative accounting to create more overdraft fees.
We have started moving some of our money over to an ING account. At least they have a sane overdraft policy of just charging you a flat interest rate on the funds your borrowing. IIRC the rate was 5%.
Thank you so much for the opportunity to do a guest post on your wonderful blog! I hope your readers will enjoy it much and that I will be able to do more guest posts for you in the future as you require them :)
Have a weonderful day!!
Diggy
Upgradereality.com
I believe some of the recent bank legislation will limit 1 aspect of this.
Banks will process all debits against your account before any credits. So you make a deposit at 8 am into your account in anticipation of several debits that day. At the end of the day - they process all the debits before the credit. Even though the credit was there before the debits.
Sneaky....
The fact is - most banks will do as much as they can legally to try to force you into fees. The fees are so incredibly lucrative and profitable. I have an automatic line of credit attached to my checking account for just this reason. I'd rather pay $1 minimum in interest than $50 dollars in fees. I also try to bill as many automatic payments as I can to credit cards so I can manage cash flow. Works well if you pay your cards off in full every month. Not so good if you carry a balance.
This was a poor example... You should always have a handle on your accounts and know approximately how much you have in cash... AND attach a credit line to your account if you normally hold a low balance...
If you withdrawl from an ATM that is NOT YOUR BANK, that bank will not always have an accurate balance of your account. If your treading a fine line on your checking balance, and you post 3 transactions without a high enough balance to cover it, why shouldnt a bank charge you 3 transaction fees for the 3 items you cannot cover??
Now, $30 is VERY steep, and i agree with that... If they charged you $5 per transaction you overdraw, i would be telling you to stop complaining... Fee structures are horrible, and Bank of America is the only company that sucks at the way their checks clear..."Highest first clears instead of in order of how they are presented." But, again, you should know your balance... If you cant afford it, dont buy it, or place all your purchases on a credit card and cut one check per month...
Our local bank will call us if we are overdrawn so that we can make a deposit and avoid the fee. As for other banks it is the interest rate of the fee that I object to. One recent fee worked out to be 82,563% ( http://www.rickety.us/2009/11/arkansas-bank-charges-82563-overdraft-inte... ).
Maybe my calculations are off but I think a bank should charge a fee no more than the amount of the overdraft. Perhaps they could behave like my local bank and call (or automatically email) to give you a chance to deposit funds.
We all want to unlock our DVD players, but Paul said he used a database to find the code for his player. Go search the database. And if yours isn't in there, chances are he doesn't know either!
Cat makes a great suggestion in putting the majority of purchases on a credit card that way you have less transactions coming through your checking account as a way to avoid possible overdrafts. Another thing I wish to point out, as being a former employee of Citizen's Bank, I can assure you that their overdraft policy is no better, with the exception that they do process credits before debits.
"The only way to avoid these overdraft fees is join a bank which doesn't have these."
Respectfully, I must disagree. There is one other way to avoid these overdraft fees, don't play roulette with your bank transactions in the first place.
Without defending bank practices, I can only say that knowing banks uniformly do this sort of thing, and given that knowing exactly how posts and drafts work "under the hood" is often a mystery, my only option is to change my behavior so that I don't encounter fees.
My changes include using (and paying off) a credit card every month for 95% of my transactions, and ensuring that I keep a cushion in my checking account so when I withdraw cash I know what's in there. I don't have a ton of transactions on my bank account (they're on my credit card) so I don't have multiple opportunities to overdraft, and I have the one main transaction where I pay off my credit card each month with my bank account. It's a large number, I know when it leaves the account, and what I'll have left afterward.
Every time I come across a story like this, inevitably there is a Puritan apologist for the banks somewhere in the comments. That's the pathetic part. This is the internet age. Except for paper checks that many times still travel by gasoline and truck, there is no excuse why your balance shouldn't be accurate to the penny. Banks don't want you to know your balance because they want to screw you. Yes, Puritan Ethic apologists, we could keep a register as we did in the old days, but why, especially if we never write paper checks?
Do yourselves a favor. Stop doing business with banks altogether. If you can, use USAA. Otherwise, use a credit union.
I so want the banks to be punished. Writing nasty letters just doesn't feel enough. I want them to fail. In my idealist's mind, we could return to a small nation agrarian ethic and bulldoze Wall Street. They just had their most profitable year ever while we suffer. Something isn't right.
I tried UserTester a while back. I was approved, but I had an older computer at the time and it didn't work well with their software. I think I'll give it a shot again.