4 ms·

Can someone explain to me: > It took another year to build up enough funds to use his debit card regularly. Once you have an account, is there some kind of ba

by Chris2048 8y ago

Can someone explain to me: > It took another year to build up enough funds to use his debit card regularly. Once you have an account, is there some kind of barrier to getting a debit card?

maxsilver 8y ago
Technically, there's no barrier. But practically speaking, yes, there is a huge barrier. Having an account is not enough to safely use a debit card, you also have to build up enough emergency funding to use a debit card. Otherwise, you risk a ~$50/charge for overdrafting, if you happen to be a off (even by as little as one cent). Note that you as a consumer have very little control over if/when you overdraft, as American banks can legally reorder your transactions outside of real date/time to artificially generate higher overdraft fees than actually happened in the real world. https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/#e6b79136daa3 https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-b...
- Chris2048 8y ago
  Don't overdrafts have to be authorized? Can't you get a zero-overdraft card?
  - deleted 8y ago
    [deleted]
  - Wowfunhappy 8y ago
    My bank, Chase, lets me turn off "Overdraft Protection". If I don't have enough money in my account, the debit card transaction gets denied. But, you have to explicitly request this. The so-called "protection" is on by default.
deleted 8y ago
[deleted]
kariluoma 8y ago
Some US banks charge "maintenance fees" if an account doesn't have a high enough balance, so he may have needed to wait for a large reserve to build up before using his debit card for daily purchases. e.g. Wells Fargo currently requires a minimum $1500 daily balance (or direct deposits coming in, or mortgage payment going out- neither of which are applicable here) otherwise they charge $10/month in fees. Add to this the "creative accounting" some banks use to settle debits from day-to-day, and other nuances of ACH (no fraud protection, 5 days to dispute transactions, etc.) that make payment by check or debit card non-trivial for the inexperienced.

Can someone explain to me: > It took another year to build up enough funds to use his debit card regularly. Once you have an account, is there some kind of barrier to getting a debit card?

maxsilver 8y ago

Technically, there's no barrier. But practically speaking, yes, there is a huge barrier. Having an account is not enough to safely use a debit card, you also have to build up enough emergency funding to use a debit card. Otherwise, you risk a ~$50/charge for overdrafting, if you happen to be a off (even by as little as one cent). Note that you as a consumer have very little control over if/when you overdraft, as American banks can legally reorder your transactions outside of real date/time to artificially generate higher overdraft fees than actually happened in the real world. https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/#e6b79136daa3 https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-b...

Chris2048 8y ago
Don't overdrafts have to be authorized? Can't you get a zero-overdraft card?
- deleted 8y ago
  [deleted]
- Wowfunhappy 8y ago
  My bank, Chase, lets me turn off "Overdraft Protection". If I don't have enough money in my account, the debit card transaction gets denied. But, you have to explicitly request this. The so-called "protection" is on by default.

deleted 8y ago

[deleted]

kariluoma 8y ago

Some US banks charge "maintenance fees" if an account doesn't have a high enough balance, so he may have needed to wait for a large reserve to build up before using his debit card for daily purchases. e.g. Wells Fargo currently requires a minimum $1500 daily balance (or direct deposits coming in, or mortgage payment going out- neither of which are applicable here) otherwise they charge $10/month in fees. Add to this the "creative accounting" some banks use to settle debits from day-to-day, and other nuances of ACH (no fraud protection, 5 days to dispute transactions, etc.) that make payment by check or debit card non-trivial for the inexperienced.