If you hate cc companies now

[Inkstain82]

Wait until you see what banks are about to do.

Overdraft fee reform debate begins now - The Red Tape Chronicles - msnbc.com

Banks have been making their money on "free checking" to people they know will be fee-generators for some time now. (I should know, I spent more than $1,000 in bank overdraft fees back in 2006, before I got my act together).

These laws will remove that option, which is great. But that money will be made up elsewhere. A lot of things that people are used to from banks, such as free checking, are about to go away.

[Like2Plan]

This really rubs me the wrong way. Banks are threatening consumers with unreasonable monthly checking account fees because they won't be permitted to charge unreasonable overdraft fees?

I haven't had an account with a commercial bank in ages because I can get the same services at a CU for far less. I have had "free" checking for a long time. (One account requires a minimum balance, on which they pay interest--though it is not a lot of interest these days).

What strikes me as odd is I have had accounts with the CUs for over 30 years and have not had to pay overdraft fees or a monthly fee for checking and the CU is still in fine shape...

[marvholly]

I have not had an overdraft fee for ANY reason (check or debit) in>35 years.

I have & WILL continue to have an at least free checking account because there is always some bank/cu that will want my direct deposits and other business.

Banks can threaten all they want BUT are they really making that much on overdrafts after all the manhours for reversing a debit/check and so forth? I have also heard the proposed legislation will only affect debit card usage. If there are not sufficient funds to cover the debit it will automatically be refused. There will still be consumers who cannot balance a checkbook and will write checks for money they do not have on hand hoping a paycheck is deposited in time to cover or..........

[disneysteve]

Originally Posted by marvholly

If there are not sufficient funds to cover the debit it will automatically be refused. There will still be consumers who cannot balance a checkbook and will write checks for money they do not have on hand hoping a paycheck is deposited in time to cover or..........

The whole debate about overdrafts has always baffled me. If you don't want to get hit with an overdraft fee, don't try to spend more money than you have. If you choose to spend more than you have, you deserve whatever fee the bank imposes. Complaining about it is like complaining about the cost of lottery tickets.

Personally, I think the banks and credit card companies should not allow you to charge more than your balance/limit. Just deny the charge if it would overdraw your account or put you over your limit.

[Like2Plan]

Originally Posted by disneysteve

Personally, I think the banks and credit card companies should not allow you to charge more than your balance/limit. Just deny the charge if it would overdraw your account or put you over your limit.

DS
I agree with you on this--banks should not be allowed to extend you credit without your approval. Nor, should they be allowed to re-order the debits that come in from high to low in order to maximize overdraft fees.

We have already touched on some instances where a person might have funds in their account that would have covered a debit and they get charged an overdraft fee because of a high pre-authorization amount might be freezing the funds such as a hotel that puts a 1,500 hold on for 10 days or for a while the gas stations were doing $50 and $80 (that was back when gas was over $4.00 a gal). I don't know if the bank would return the fees in such an instance...

[jasonnoguchi]

Originally Posted by disneysteve

The whole debate about overdrafts has always baffled me. If you don't want to get hit with an overdraft fee, don't try to spend more money than you have. If you choose to spend more than you have, you deserve whatever fee the bank imposes. Complaining about it is like complaining about the cost of lottery tickets.

Personally, I think the banks and credit card companies should not allow you to charge more than your balance/limit. Just deny the charge if it would overdraw your account or put you over your limit.

Agreed. Nobody should spend more than what they have and then own things they never really own. sigh.....

[ActYourWage]

Originally Posted by disneysteve

The whole debate about overdrafts has always baffled me. If you don't want to get hit with an overdraft fee, don't try to spend more money than you have. If you choose to spend more than you have, you deserve whatever fee the bank imposes. Complaining about it is like complaining about the cost of lottery tickets.

Personally, I think the banks and credit card companies should not allow you to charge more than your balance/limit. Just deny the charge if it would overdraw your account or put you over your limit.

Sometimes it is not the case they don't have the money, for instance, this has happened before. This person had a positive balance on a Wednesday night and they where to have their pay check direct deposited that night too. The person went to bed with a positive balance but awaken the next day with a negative balance because there were some outstanding debits that got posted even though that person had their money direct deposited (which showed, but was a memo) at the same time, technicially that money (the direct deposit) did not get "posted" until the next night therefore resulting in overdraft fees.

Point of that story - don't go by the balance showing on the web site, but rather what you record in your checkbook/ledger.

The second part I agree.

[disneysteve]

Originally Posted by ActYourWage

don't go by the balance showing on the web site, but rather what you record in your checkbook/ledger.

Absolutely. Anyone who depends on the balance on the website or on an ATM receipt needs a course in remedial account management. That number is just a snapshot of the balance at that moment. It doesn't reflect outstanding checks, for example, or deposits that haven't posted yet. Why would anyone possibly depend on the online balance for anything?

[lovcom]

What I suspect will happen is that fees across the board will shoot up, except for those that carry a minimum average balance in their checking account, and I suspect those folks will continue to enjoy free checking, and other free services. If overdraft fees skyrocket responsible folks should not care. Banks should reward the responsible, and punish the irresponsible (let them provide the bank profits).

[disneysteve]

Originally Posted by lovcom

Banks should reward the responsible, and punish the irresponsible (let them provide the bank profits).

They'd much rather have the irresponsible customers. They make a lot more money from them.

I've always had free checking. I've never bounced a check. I've never overdrawn my account. The bank has never gotten a penny in fees or penalties from me. I think I'm a great customer but they probably don't agree.