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> 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

by 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.
    - judge2020 3y ago
      How does it work to where fraudulent checks can’t be clawed back in the EU?
      - aftbit 3y ago
        You can't write checks. You give your bank account number and the debit is done online in real time.
        RHSeeger 3y ago
        And what happens if they transfer money to you via debit online in real time, and then _that_ turns out to be fraudulent. Does the bank that paid the money to you get it back from your bank, or does it eat the cost? Note that, when we're talking about a fraudulent cheque, and it being clawed back, it's already been cleared by the source bank. As such, there is no longer a difference between the check and a real time debit.
      - eru 3y ago
        Approximately nobody uses any checks in the EU countries we are talking about here. (And I don't think those accounts would come with a check book. That's something you specifically have to ask for, and might come with a credit check.)
- eru 3y ago
  I had a lot of frustration in the UK, when I tried to get a bank account that could not be overdrawn. Basically, I wanted the German experience where your transaction is just declined, if you don't have the funds, without further repercussions. In the UK, the banks might or might not approve that transaction, and definitely charge you an outrageous fee either way. The only choice on offer in the UK at the time was whether you pre-arrange an overdraft, which is slightly cheaper (but still expensive). Or whether they give an you an 'unarranged overdraft', which you can't not accept, which is crazy expensive.
  - gambiting 3y ago
    Well yes, but (at least in my experience) there is no fee for just going into an unarranfed overdraft, as long as you've paid it off within 24 hours.
    - eru 3y ago
      My UK bank at the time (I think it was NatWest or Santander or so) charged me for every (attempted) payment or (attempted) withdrawal, even when they failed.
  - madsbuch 3y ago
    The easiest way would probably be ro get a Revolut/Wise account and charge it from the account that can go in overdraft. But I agree, the traditional banks have had a hard time getting up to speed while new banks seems to see it as a way to handle their liability: At Revolut scale you can not manage individual customers with negative balance while offering the service at a competitive price point.
    - eru 3y ago
      Revolut and Wise (and Monzo) were only just getting started when my story happened. At the end (around 2017 or so), I got a Monzo account, and was very happy with them.

by 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.
  - judge2020 3y ago
    How does it work to where fraudulent checks can’t be clawed back in the EU?
    - aftbit 3y ago
      You can't write checks. You give your bank account number and the debit is done online in real time.
      - RHSeeger 3y ago
        And what happens if they transfer money to you via debit online in real time, and then _that_ turns out to be fraudulent. Does the bank that paid the money to you get it back from your bank, or does it eat the cost? Note that, when we're talking about a fraudulent cheque, and it being clawed back, it's already been cleared by the source bank. As such, there is no longer a difference between the check and a real time debit.
    - eru 3y ago
      Approximately nobody uses any checks in the EU countries we are talking about here. (And I don't think those accounts would come with a check book. That's something you specifically have to ask for, and might come with a credit check.)
eru 3y ago
I had a lot of frustration in the UK, when I tried to get a bank account that could not be overdrawn. Basically, I wanted the German experience where your transaction is just declined, if you don't have the funds, without further repercussions. In the UK, the banks might or might not approve that transaction, and definitely charge you an outrageous fee either way. The only choice on offer in the UK at the time was whether you pre-arrange an overdraft, which is slightly cheaper (but still expensive). Or whether they give an you an 'unarranged overdraft', which you can't not accept, which is crazy expensive.
- gambiting 3y ago
  Well yes, but (at least in my experience) there is no fee for just going into an unarranfed overdraft, as long as you've paid it off within 24 hours.
  - eru 3y ago
    My UK bank at the time (I think it was NatWest or Santander or so) charged me for every (attempted) payment or (attempted) withdrawal, even when they failed.
- madsbuch 3y ago
  The easiest way would probably be ro get a Revolut/Wise account and charge it from the account that can go in overdraft. But I agree, the traditional banks have had a hard time getting up to speed while new banks seems to see it as a way to handle their liability: At Revolut scale you can not manage individual customers with negative balance while offering the service at a competitive price point.
  - eru 3y ago
    Revolut and Wise (and Monzo) were only just getting started when my story happened. At the end (around 2017 or so), I got a Monzo account, and was very happy with them.