5 ms·

While I think overdraft fees are gross and exorbitant (and I fell at their mercy a few times before I finally wizened up and got overdraft protection), I don't

by jmduke 13y ago

While I think overdraft fees are gross and exorbitant (and I fell at their mercy a few times before I finally wizened up and got overdraft protection), I don't really think this is that big of an issue (at least, compared to other issues in the banking system.) It's a pretty solvable problem from the consumer end -- don't spend money on a card if you're not sure you have at least X in your account.

chadcf 13y ago
This can get a little tricky though... I have two bank accounts, one which is my monthly spending and one which is my emergency fund. Because of this I transfer surplus money out of my monthly spending account so that what I have in there is just my budget, forcing me to stick to it. Unfortunately sometimes this causes me to overdraft because of a payment I forgot about (a few months ago it was eBay seller fees, first time in a year I sold something on eBay) or because some credit transactions won't show up for a day or two. Of course this is still easy to solve by monitoring your account and knowing where you stand plus keeping a buffer. Since I like to keep my main spending account set with just my monthly budget I get around it by having a small overdraft line of credit. The 8% interest on that is a lot cheaper than the $40 overdraft fee and usually if I use it it's only because I'm over by a few dollars.
otterley 13y ago
This is needlessly burdening the customer, which in my opinion is the textbook definition of bad customer service. The days of hand-written checks in the consumer space are largely gone; and the bank knows at any given moment what the customer's current account balance is and which transactions are pending. Permitting a card-based withdrawal or debit request that the bank already knows is likely to result in an NSF at settlement time is both misleading and adversarial to the customer. This entire issue would grind to a halt immediately if banks properly denied debit requests when permitting them would yield an NSF.
- jeffasinger 13y ago
  I agree that this would work for debit transactions, but, my understanding is that the way ACH works, it would be rather difficult to accomplish this.
- flagnog 13y ago
  wtf? If the person can't be bothered with keeping track of their charges, they deserve a penalty.

by jmduke 13y ago

chadcf 13y ago

This can get a little tricky though... I have two bank accounts, one which is my monthly spending and one which is my emergency fund. Because of this I transfer surplus money out of my monthly spending account so that what I have in there is just my budget, forcing me to stick to it. Unfortunately sometimes this causes me to overdraft because of a payment I forgot about (a few months ago it was eBay seller fees, first time in a year I sold something on eBay) or because some credit transactions won't show up for a day or two. Of course this is still easy to solve by monitoring your account and knowing where you stand plus keeping a buffer. Since I like to keep my main spending account set with just my monthly budget I get around it by having a small overdraft line of credit. The 8% interest on that is a lot cheaper than the $40 overdraft fee and usually if I use it it's only because I'm over by a few dollars.

otterley 13y ago

This is needlessly burdening the customer, which in my opinion is the textbook definition of bad customer service. The days of hand-written checks in the consumer space are largely gone; and the bank knows at any given moment what the customer's current account balance is and which transactions are pending. Permitting a card-based withdrawal or debit request that the bank already knows is likely to result in an NSF at settlement time is both misleading and adversarial to the customer. This entire issue would grind to a halt immediately if banks properly denied debit requests when permitting them would yield an NSF.

jeffasinger 13y ago
I agree that this would work for debit transactions, but, my understanding is that the way ACH works, it would be rather difficult to accomplish this.
flagnog 13y ago
wtf? If the person can't be bothered with keeping track of their charges, they deserve a penalty.