5 ms·

>>Basically, a bank account where the bank does not extend you credit. A purely 'pre-paid' affair. That's like......every normal bank account? At least in Pola

>>Basically, a bank account where the bank does not extend you credit. A purely 'pre-paid' affair. That's like......every normal bank account? At least in Poland, UK and Germany(as you mentioned). By default you don't get any overdraft, you can't go below zero so to speak. If you do(with an offline transaction that wasn't authorized live with the bank) then usually you get 24 hours to pay it off and start paying heavy penalties beyond that point.

paulmd 3y ago
that is precisely what “overdraft fees” means
- Symbiote 3y ago
  Britain does have a "basic account", usually used by people with debt problems. It has no unarranged overdraft facility. Example: https://www.barclays.co.uk/current-accounts/basic-account/ https://www.barclays.co.uk/current-accounts/basic-account/ I assume the debit card is configured to refuse offline transactions.
  - paulmd 3y ago
    So what happens if a deposit is reversed when there aren’t sufficient funds to cover it?
    - jpsouth 3y ago
      It’s a good question. There aren’t many circumstances that this would happen, however when it does there are still no fees on the account (at least the ‘Cash Account’ at the bank I worked at) - it would go into a negative balance, not incur any fees and when the next credits came in, they’d get eaten by the negative balance. This usually meant the customer would need to call up a service centre, who would arrange a ‘planned overdraft’ of sorts, still with zero fees, but it would allow them access to a portion of their funds and we’d do the same again the following week and so on. Very inconvenient for all involved, these people are often completely financially illiterate (and frequently just illiterate) and have zero clue how to manage their bank account. I tried to educate them consistently, but week in week out I had the same conversations with the same people when they didn’t understand how they had no funds available to them, even though they’d been ‘paid’ that day.
      - paulmd 3y ago
        honestly thanks for responding in good faith/spirits, probably was a bit overly snarky I appreciate the thought put into the answer, and I do grasp that the point is that the EU system has converged on much faster resolution times than the US and different social systems based on that etc. There just always are tons and tons of weird edge-cases (what if you get a court-ordered transaction reversal or order to the bank somehow etc) that lead to the same "you're overdrafted, and you have to pay up and then pay a fee..."
    - deleted 3y ago
      [deleted]
    - madsbuch 3y ago
      I reckon the situation would be, eg., a waiter taking a check on a card. First: this situation does not happen in EU. Alle restaurants have connected handheld devices. But when an EU citizen go to the US and pays? I reckon that the restaurant would have a check that bounces and won't get paid.
  - jdietrich 3y ago
    Yes - you can't make offline card transactions, you don't get a chequebook, but there are no overdraft fees because there's no overdraft facility. The nine largest banks are legally required to offer Basic Bank Accounts to practically anyone. This, combined with the fact that welfare must be paid by bank transfer in nearly all circumstances, means that a) essentially everyone in the UK has a bank account and b) cheque cashing isn't really a thing. Some banks have an account-opening service specifically for people with no fixed address and/or no identity documents. From a UK perspective, the situation in the US just looks like a completely avoidable policy failure. https://assets.publishing.service.gov.uk/media/63f7bbd78fa8f527f7342eff/Basic_Bank_Account_Report_2022.pdf https://assets.publishing.service.gov.uk/media/63f7bbd78fa8f... https://england.shelter.org.uk/professional_resources/no_fixed_address_bank_accounts https://england.shelter.org.uk/professional_resources/no_fix...
  - gambiting 3y ago
    >>usually used by people with debt problems. That's the first time I've ever heard that assumption, and I live in the UK - basic checking account(with no overdraft) is just what everyone has by default, if you want credit you just apply for a credit card - that's my experience at least.
    - Symbiote 3y ago
      It is literally in the subheading on the Barclay's page I linked: "If you don’t qualify for a regular current account, don’t yet have a UK account, or you’re experiencing financial difficulty, this could be the right account for you." Most people have an ordinary account like this one: https://www.barclays.co.uk/current-accounts/bank-account/ https://www.barclays.co.uk/current-accounts/bank-account/ However, the general situation for overdrafts seems to have changed since I left the UK — I don't know the details: https://www.theguardian.com/business/2020/jan/28/uk-banks-overdraft-rates-fca https://www.theguardian.com/business/2020/jan/28/uk-banks-ov...
      - gambiting 3y ago
        Well yes sorry - the linked account is indeed a "basic" account for people in difficult position, I suppose. But what Barclays calls "regular current account" also doesn't have any overdraft, not unless you applied for one.
  - eru 3y ago
    When I was living in the UK I tried to get an account with no 'unarranged overdraft' but the banks I tried with made it hard enough that I gave up.
    - Symbiote 3y ago
      You needed the magic word "basic", and confidence in your right to the account. The banks presumably make a loss on these accounts, at least in the short term, and seem to hope you'd give up and try with a different bank. A Bulgarian guy in a flat share was keeping his money under the bed as he had been turned away by the banks. I printed the "Basic" account information and with that in hand he had an account the next day. (This might all be 10-15 years out of date.)
- p_l 3y ago
  You can't really overdraft a polish bank account that doesn't have explicitly declared overdraft facility. This is combined with the fact that no account supports cheques anymore.
ViewTrick1002 3y ago
Many of my friends even went as far as using that as a method to handle their personal finance as students. Transfer most of the money to the savings account and then when getting declined buying food top up the card account and rely on it instantly being available. Having negative trigger each time going above the pre-planned spending for the month. Hell, I still do it. I have one card for groceries which gives me a mental picture of how much I have spent on food given what day it is when it gets declined each month. I would presume this comes from being the generation that grew up only knowing about debit cards. Most got a personal one at the age of 13 or so and never really used cash. Guessing it is even earlier today. Didn't get a credit card until first time I was planning to rent a car when travelling knowing how much easier it would be.
- eru 3y ago
  > Didn't get a credit card until first time I was planning to rent a car when travelling knowing how much easier it would be. I still don't use a credit card for that. I have a debit card that's part of Visa, so most businesses don't care whether it's debit or credit.
  - gambiting 3y ago
    They definitely do though - all big brands like Avis, Europcar, Hertz will refuse a Visa Debit card, it has to be a Credit card - I always have to use smaller local rental companies which are willing to take a risk on a debit card. At least that has been my experience renting around Europe.
    - eru 3y ago
      Interesting. I'm mostly in Asia and Australia these days. Though recently I rented a car in the Netherlands, and my debit card was just fine. (I don't have a credit card.)
noja 3y ago
> That's like......every normal bank account? No. Every normal bank account can go overdrawn. Try it: low value purchases or withdrawals are not transactional (they are eventually consistent).
- madsbuch 3y ago
  In most EU banks a line of credit is something you apply for. Cards are usually also attached directly to the account. Banks in Denmark are obligated to extend a basic account to all customers and usually do it with a debit card. Ie. no offline transactions and no transactions that can not be immediately cleared. I don't know why you dismiss this. If you are from the US then be aware that EU and US banking systems are wildly different (where the US system is really good for the wealthy people). If you are from EU, then it sounds like you haven't changed your banking situation or stayed up to date in at least 15 years.
  - RHSeeger 3y ago
    In the US, it's possible to become overdrawn even if you wait for a check to clear. Assuming there is a check "writer" and a check "casher" - A portion of the check is made available to the casher (said to be "cleared", but not really) before the writer's bank even responds - After the writer's bank has cleared the check, it can still reverse the transaction and take back the funds. For example, if the check is found to be fraudulent. So, for example, you can deposit a check into your account, wait a month to be sure it's cleared, take the money out, and then have the money "taken back"; leaving your account in the negative. As such, even for accounts that don't have any "line of credit", the bank still winds up "lending you money". Effectively, EVERY bank account in the US has credit built into it in some way.
    - madsbuch 3y ago
      It definitely seems like there are some bad policy going on here. I would recommend lobbying to have it changed – None of these things can happen in EU countries, so it is not technically given that it has to work like that.
Amezarak 3y ago
There is a large population of people in America that depend on being able to overdraft. It doesn't make sense to me, it doesn't make sense to you, but if they were given the option between "overdraft" and "no overdraft" they will always choose overdraft. It's important to be aware of this use case for understanding the US system as practiced. IME they eventually end up abusing it (repeatedly not paying the fees) and then the bank closes their account, at which time they move on. One way they strategically avoid or delay paying the fees if they can't / don't want to is by avoiding direct deposit. Then, you can either deposit the check (ready to pay overdraft fees and get account positive) or cash the check at a check-cashing (for a fee that will likely be less than the overdraft + overdraft fees).

paulmd 3y ago

that is precisely what “overdraft fees” means

Symbiote 3y ago
Britain does have a "basic account", usually used by people with debt problems. It has no unarranged overdraft facility. Example: https://www.barclays.co.uk/current-accounts/basic-account/ https://www.barclays.co.uk/current-accounts/basic-account/ I assume the debit card is configured to refuse offline transactions.
- paulmd 3y ago
  So what happens if a deposit is reversed when there aren’t sufficient funds to cover it?
  - jpsouth 3y ago
    It’s a good question. There aren’t many circumstances that this would happen, however when it does there are still no fees on the account (at least the ‘Cash Account’ at the bank I worked at) - it would go into a negative balance, not incur any fees and when the next credits came in, they’d get eaten by the negative balance. This usually meant the customer would need to call up a service centre, who would arrange a ‘planned overdraft’ of sorts, still with zero fees, but it would allow them access to a portion of their funds and we’d do the same again the following week and so on. Very inconvenient for all involved, these people are often completely financially illiterate (and frequently just illiterate) and have zero clue how to manage their bank account. I tried to educate them consistently, but week in week out I had the same conversations with the same people when they didn’t understand how they had no funds available to them, even though they’d been ‘paid’ that day.
    - paulmd 3y ago
      honestly thanks for responding in good faith/spirits, probably was a bit overly snarky I appreciate the thought put into the answer, and I do grasp that the point is that the EU system has converged on much faster resolution times than the US and different social systems based on that etc. There just always are tons and tons of weird edge-cases (what if you get a court-ordered transaction reversal or order to the bank somehow etc) that lead to the same "you're overdrafted, and you have to pay up and then pay a fee..."
  - deleted 3y ago
    [deleted]
  - madsbuch 3y ago
    I reckon the situation would be, eg., a waiter taking a check on a card. First: this situation does not happen in EU. Alle restaurants have connected handheld devices. But when an EU citizen go to the US and pays? I reckon that the restaurant would have a check that bounces and won't get paid.
- jdietrich 3y ago
  Yes - you can't make offline card transactions, you don't get a chequebook, but there are no overdraft fees because there's no overdraft facility. The nine largest banks are legally required to offer Basic Bank Accounts to practically anyone. This, combined with the fact that welfare must be paid by bank transfer in nearly all circumstances, means that a) essentially everyone in the UK has a bank account and b) cheque cashing isn't really a thing. Some banks have an account-opening service specifically for people with no fixed address and/or no identity documents. From a UK perspective, the situation in the US just looks like a completely avoidable policy failure. https://assets.publishing.service.gov.uk/media/63f7bbd78fa8f527f7342eff/Basic_Bank_Account_Report_2022.pdf https://assets.publishing.service.gov.uk/media/63f7bbd78fa8f... https://england.shelter.org.uk/professional_resources/no_fixed_address_bank_accounts https://england.shelter.org.uk/professional_resources/no_fix...
- gambiting 3y ago
  >>usually used by people with debt problems. That's the first time I've ever heard that assumption, and I live in the UK - basic checking account(with no overdraft) is just what everyone has by default, if you want credit you just apply for a credit card - that's my experience at least.
  - Symbiote 3y ago
    It is literally in the subheading on the Barclay's page I linked: "If you don’t qualify for a regular current account, don’t yet have a UK account, or you’re experiencing financial difficulty, this could be the right account for you." Most people have an ordinary account like this one: https://www.barclays.co.uk/current-accounts/bank-account/ https://www.barclays.co.uk/current-accounts/bank-account/ However, the general situation for overdrafts seems to have changed since I left the UK — I don't know the details: https://www.theguardian.com/business/2020/jan/28/uk-banks-overdraft-rates-fca https://www.theguardian.com/business/2020/jan/28/uk-banks-ov...
    - gambiting 3y ago
      Well yes sorry - the linked account is indeed a "basic" account for people in difficult position, I suppose. But what Barclays calls "regular current account" also doesn't have any overdraft, not unless you applied for one.
- eru 3y ago
  When I was living in the UK I tried to get an account with no 'unarranged overdraft' but the banks I tried with made it hard enough that I gave up.
  - Symbiote 3y ago
    You needed the magic word "basic", and confidence in your right to the account. The banks presumably make a loss on these accounts, at least in the short term, and seem to hope you'd give up and try with a different bank. A Bulgarian guy in a flat share was keeping his money under the bed as he had been turned away by the banks. I printed the "Basic" account information and with that in hand he had an account the next day. (This might all be 10-15 years out of date.)
p_l 3y ago
You can't really overdraft a polish bank account that doesn't have explicitly declared overdraft facility. This is combined with the fact that no account supports cheques anymore.

ViewTrick1002 3y ago

Many of my friends even went as far as using that as a method to handle their personal finance as students. Transfer most of the money to the savings account and then when getting declined buying food top up the card account and rely on it instantly being available. Having negative trigger each time going above the pre-planned spending for the month. Hell, I still do it. I have one card for groceries which gives me a mental picture of how much I have spent on food given what day it is when it gets declined each month. I would presume this comes from being the generation that grew up only knowing about debit cards. Most got a personal one at the age of 13 or so and never really used cash. Guessing it is even earlier today. Didn't get a credit card until first time I was planning to rent a car when travelling knowing how much easier it would be.

eru 3y ago
> Didn't get a credit card until first time I was planning to rent a car when travelling knowing how much easier it would be. I still don't use a credit card for that. I have a debit card that's part of Visa, so most businesses don't care whether it's debit or credit.
- gambiting 3y ago
  They definitely do though - all big brands like Avis, Europcar, Hertz will refuse a Visa Debit card, it has to be a Credit card - I always have to use smaller local rental companies which are willing to take a risk on a debit card. At least that has been my experience renting around Europe.
  - eru 3y ago
    Interesting. I'm mostly in Asia and Australia these days. Though recently I rented a car in the Netherlands, and my debit card was just fine. (I don't have a credit card.)

noja 3y ago

> That's like......every normal bank account? No. Every normal bank account can go overdrawn. Try it: low value purchases or withdrawals are not transactional (they are eventually consistent).

madsbuch 3y ago
In most EU banks a line of credit is something you apply for. Cards are usually also attached directly to the account. Banks in Denmark are obligated to extend a basic account to all customers and usually do it with a debit card. Ie. no offline transactions and no transactions that can not be immediately cleared. I don't know why you dismiss this. If you are from the US then be aware that EU and US banking systems are wildly different (where the US system is really good for the wealthy people). If you are from EU, then it sounds like you haven't changed your banking situation or stayed up to date in at least 15 years.
- RHSeeger 3y ago
  In the US, it's possible to become overdrawn even if you wait for a check to clear. Assuming there is a check "writer" and a check "casher" - A portion of the check is made available to the casher (said to be "cleared", but not really) before the writer's bank even responds - After the writer's bank has cleared the check, it can still reverse the transaction and take back the funds. For example, if the check is found to be fraudulent. So, for example, you can deposit a check into your account, wait a month to be sure it's cleared, take the money out, and then have the money "taken back"; leaving your account in the negative. As such, even for accounts that don't have any "line of credit", the bank still winds up "lending you money". Effectively, EVERY bank account in the US has credit built into it in some way.
  - madsbuch 3y ago
    It definitely seems like there are some bad policy going on here. I would recommend lobbying to have it changed – None of these things can happen in EU countries, so it is not technically given that it has to work like that.

Amezarak 3y ago

There is a large population of people in America that depend on being able to overdraft. It doesn't make sense to me, it doesn't make sense to you, but if they were given the option between "overdraft" and "no overdraft" they will always choose overdraft. It's important to be aware of this use case for understanding the US system as practiced. IME they eventually end up abusing it (repeatedly not paying the fees) and then the bank closes their account, at which time they move on. One way they strategically avoid or delay paying the fees if they can't / don't want to is by avoiding direct deposit. Then, you can either deposit the check (ready to pay overdraft fees and get account positive) or cash the check at a check-cashing (for a fee that will likely be less than the overdraft + overdraft fees).