7 ms·

that is precisely what “overdraft fees” means

by paulmd 3y ago

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.

that is precisely what “overdraft fees” means

by paulmd 3y ago

that is precisely what “overdraft fees” means

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.