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I don't understand why overdraft hasn't been outlawed. It's literally a tax on you if you make one tiny mistake or your bank make a mistake. If I dont have the

I don't understand why overdraft hasn't been outlawed. It's literally a tax on you if you make one tiny mistake or your bank make a mistake. If I dont have the money block the transaction and offer a line of credit with specific apr for those that want to be able to overdraft.

eclipxe 4y ago
That's fairly common, most banks have "overdraft protection" that works exactly how you described.
- galleywest200 4y ago
  Correct. I called my bank and had them enable this for my debit card. They made sure to clarify that ACH transactions will still go through, however.
- mullingitover 4y ago
  I've used a credit union my whole adult life and they did't offer overdraft as an option. That's because it was automatically enabled by default. This is what banks would do if they weren't predatory.
- nomagicbullet 4y ago
  It is not exactly the same thing. The commenter you are responding to is looking to avoid overdraft, not having an insurance on overdraft. I'd agree with the idea of avoiding overdraft entirely unless a customer signs up for it. I don't want transactions I can't afford to go through. I manage my accounts quite closely. For me such situation would be 99% an unintended transaction that I would like to cancel. By letting such requests go through, banks put the burden on the customers to clean up after a wrong or, in many cases, illegal transaction. YMMV.
  - vorpalhex 4y ago
    Overdrafting IS opt-in. I had a bank charge me an overdraft fee. I asked them to show me my overdraft authorization. It's amazing how fast a bank can return money when they screw up.
  - Spoom 4y ago
    I turned overdraft coverage off at my bank. You can turn it on and off on-demand through their website. If your bank won't let you do this, consider another bank.
- danielsju6 4y ago
  Then they charge $30 to reject the transaction, another $30 when you go "odd and try to swipe again", then extra money because you didn't have the $30 to cover the fee in your account, then recursively until you're $1200 in the hole and they're refusing to cover it.
bluedino 4y ago
> I don't understand why overdraft hasn't been outlawed. It's a felony to write a check that you don't have the funds for. Oh, you mean for the bank.
- sschueller 4y ago
  Do checks still exist in the US? Edit: Here in Europe no one uses checks since I can remember (since the 80s?). In Switzerland lots of cash and direct bank transfers.
  - anvuong 4y ago
    Last year, my first month salary in the US came in the form of a check, since I didn't have my bank account ready at the time. So yeah checks are still common.
  - noahtallen 4y ago
    Not sure if sarcastic, but: Yes, definitely! Not that common, but sometimes useful for big in-person purchases or down payments. I have needed to write one maybe once in the last five years. Banking apps let you deposit by taking a picture. But I’ve received a few checks as gifts or payment.
  - cobertos 4y ago
    Yeah, I just got paid with one the other week. It was the easiest way to take money when the person has no tech savvy (and can't figure out how to send an ACH)
  - jackson1442 4y ago
    You generally can't pay rent in cash, and the last place I lived wanted $20(!!!!!) in service fees to pay online through _any_ means. They got a hand-delivered check each month. So yeah, they're pretty common here still, mostly in businesses that haven't kept up with the times.
  - bluedino 4y ago
    > Do checks still exist in the US? Of course. I was stuck behind an older lady writing one for groceries, just the other day.
adrr 4y ago
More than likely those weren't overdraft protection since i think are only opt-in now. There are fees for having a negative balance which is outside of overdraft protection. There is no way to prevent an account from going negative like with ACH reversal.

eclipxe 4y ago

That's fairly common, most banks have "overdraft protection" that works exactly how you described.

galleywest200 4y ago
Correct. I called my bank and had them enable this for my debit card. They made sure to clarify that ACH transactions will still go through, however.
mullingitover 4y ago
I've used a credit union my whole adult life and they did't offer overdraft as an option. That's because it was automatically enabled by default. This is what banks would do if they weren't predatory.
nomagicbullet 4y ago
It is not exactly the same thing. The commenter you are responding to is looking to avoid overdraft, not having an insurance on overdraft. I'd agree with the idea of avoiding overdraft entirely unless a customer signs up for it. I don't want transactions I can't afford to go through. I manage my accounts quite closely. For me such situation would be 99% an unintended transaction that I would like to cancel. By letting such requests go through, banks put the burden on the customers to clean up after a wrong or, in many cases, illegal transaction. YMMV.
- vorpalhex 4y ago
  Overdrafting IS opt-in. I had a bank charge me an overdraft fee. I asked them to show me my overdraft authorization. It's amazing how fast a bank can return money when they screw up.
- Spoom 4y ago
  I turned overdraft coverage off at my bank. You can turn it on and off on-demand through their website. If your bank won't let you do this, consider another bank.
danielsju6 4y ago
Then they charge $30 to reject the transaction, another $30 when you go "odd and try to swipe again", then extra money because you didn't have the $30 to cover the fee in your account, then recursively until you're $1200 in the hole and they're refusing to cover it.

bluedino 4y ago

> I don't understand why overdraft hasn't been outlawed. It's a felony to write a check that you don't have the funds for. Oh, you mean for the bank.

sschueller 4y ago
Do checks still exist in the US? Edit: Here in Europe no one uses checks since I can remember (since the 80s?). In Switzerland lots of cash and direct bank transfers.
- anvuong 4y ago
  Last year, my first month salary in the US came in the form of a check, since I didn't have my bank account ready at the time. So yeah checks are still common.
- noahtallen 4y ago
  Not sure if sarcastic, but: Yes, definitely! Not that common, but sometimes useful for big in-person purchases or down payments. I have needed to write one maybe once in the last five years. Banking apps let you deposit by taking a picture. But I’ve received a few checks as gifts or payment.
- cobertos 4y ago
  Yeah, I just got paid with one the other week. It was the easiest way to take money when the person has no tech savvy (and can't figure out how to send an ACH)
- jackson1442 4y ago
  You generally can't pay rent in cash, and the last place I lived wanted $20(!!!!!) in service fees to pay online through _any_ means. They got a hand-delivered check each month. So yeah, they're pretty common here still, mostly in businesses that haven't kept up with the times.
- bluedino 4y ago
  > Do checks still exist in the US? Of course. I was stuck behind an older lady writing one for groceries, just the other day.

adrr 4y ago

More than likely those weren't overdraft protection since i think are only opt-in now. There are fees for having a negative balance which is outside of overdraft protection. There is no way to prevent an account from going negative like with ACH reversal.