5 ms·

Or the bank can just automatically give you an overdraft for that amount, add some fees because you accessed that facility, and require you to pay the full amou

by daemin 9y ago

Or the bank can just automatically give you an overdraft for that amount, add some fees because you accessed that facility, and require you to pay the full amount. After all, they're just being helpful in managing your money and paying your suppliers.

douche 9y ago
This is why no reasonable person should use debit cards for recurring payments. I'd advise not using debit cards for anything, under any circumstances, and relying on the better protections that credit cards provide, but it's a losing battle. My debit card is ATM-only.
- corford 9y ago
  You're right and the trick is setting up a separate account for the debit card (ideally with a different bank). This is generally a good approach for all sorts of reasons, not just protection from over enthusiastic cloud bills. Keep most of your funds in one bank (and never use the cards). Transfer from this account to one or more other accounts with other banks and use the cards on these secondary accounts to pay for things. This way you're protected from suppliers over billing and banks going crazy with unarranged overdrafts (which aren't secured so absolute worst case you just tell them to fuck off and default on it). Basically, the trick is holding on to your cash. Much harder to fix things rapidly if you're having to negotiate with a third party between you and the supplier (which is the case with a credit card company).
corford 9y ago
Not sure who you bank with but our bank will bounce it if honouring it would require going overdrawn beyond €500.
- daemin 9y ago
  There are limits to overdraw facilities, sure. But they are also included by default in many accounts.
  - jtriangle 9y ago
    You can usually have them turn off the ability to overdraw.
taneq 9y ago
Can you not ask the bank not to do this, though?
- dqv 9y ago
  Yes, you can. The last few banks accounts I've created have all asked if I wanted overdraft protection. You say "NO! decline ANY transaction that would cause an overdraft"
  - MichaelGG 9y ago
    But they seem to be able to delay debits for several days, perhaps a week? At least on WellsFargo. Isn't this a backdoor/loophole to get around the no overdraft issue?
- specialp 9y ago
  Now in the USA as of 2012, banks cannot turn on overdraft protection on a debit card unless the customer requests. Prior to this they were taking your day's debits and applying the largest one first. So suppose you bought lunch for $10 and a coffee for $3 then your cable company later in the day billed you for an amount in excess of your account. They would then apply the cable company bill first, then the 2 smaller charges to maximize overdraft fees and hit you with 3 $30 charges.
  - danellis 9y ago
    The order wouldn't matter in that case, would it? Either way it's still deducting the sum of those three transactions at the end of the day. I thought what they were doing is applying all your debits, charging you if that puts you into overdraft, and then applying any credits. If they applied the credits first, you wouldn't go below zero.
    - smeyer 9y ago
      The order still matters. If you have $20 in your account and get hit with three debits for $6, $10, and then $30, processing them in order means the $6 and $10 debits go through, leaving you with $4 in the bank, then the $30 debit causes an overdraft and a single fee. Comparatively, processing the $30 debit first immediately causes an overdraft, and the $10 and $6 debits cause two more overdrafts for three total fees. Either way, you're trying to charge $46 against an account with $20, but one method results in 1 fee and one method results in 3 fees. The issue of credits vs debits you mentioned can compound this issue.

by daemin 9y ago

douche 9y ago

This is why no reasonable person should use debit cards for recurring payments. I'd advise not using debit cards for anything, under any circumstances, and relying on the better protections that credit cards provide, but it's a losing battle. My debit card is ATM-only.

corford 9y ago
You're right and the trick is setting up a separate account for the debit card (ideally with a different bank). This is generally a good approach for all sorts of reasons, not just protection from over enthusiastic cloud bills. Keep most of your funds in one bank (and never use the cards). Transfer from this account to one or more other accounts with other banks and use the cards on these secondary accounts to pay for things. This way you're protected from suppliers over billing and banks going crazy with unarranged overdrafts (which aren't secured so absolute worst case you just tell them to fuck off and default on it). Basically, the trick is holding on to your cash. Much harder to fix things rapidly if you're having to negotiate with a third party between you and the supplier (which is the case with a credit card company).

corford 9y ago

Not sure who you bank with but our bank will bounce it if honouring it would require going overdrawn beyond €500.

daemin 9y ago
There are limits to overdraw facilities, sure. But they are also included by default in many accounts.
- jtriangle 9y ago
  You can usually have them turn off the ability to overdraw.

taneq 9y ago

Can you not ask the bank not to do this, though?

dqv 9y ago
Yes, you can. The last few banks accounts I've created have all asked if I wanted overdraft protection. You say "NO! decline ANY transaction that would cause an overdraft"
- MichaelGG 9y ago
  But they seem to be able to delay debits for several days, perhaps a week? At least on WellsFargo. Isn't this a backdoor/loophole to get around the no overdraft issue?
specialp 9y ago
Now in the USA as of 2012, banks cannot turn on overdraft protection on a debit card unless the customer requests. Prior to this they were taking your day's debits and applying the largest one first. So suppose you bought lunch for $10 and a coffee for $3 then your cable company later in the day billed you for an amount in excess of your account. They would then apply the cable company bill first, then the 2 smaller charges to maximize overdraft fees and hit you with 3 $30 charges.
- danellis 9y ago
  The order wouldn't matter in that case, would it? Either way it's still deducting the sum of those three transactions at the end of the day. I thought what they were doing is applying all your debits, charging you if that puts you into overdraft, and then applying any credits. If they applied the credits first, you wouldn't go below zero.
  - smeyer 9y ago
    The order still matters. If you have $20 in your account and get hit with three debits for $6, $10, and then $30, processing them in order means the $6 and $10 debits go through, leaving you with $4 in the bank, then the $30 debit causes an overdraft and a single fee. Comparatively, processing the $30 debit first immediately causes an overdraft, and the $10 and $6 debits cause two more overdrafts for three total fees. Either way, you're trying to charge $46 against an account with $20, but one method results in 1 fee and one method results in 3 fees. The issue of credits vs debits you mentioned can compound this issue.