No overdrawing with ATM card vs Debit card?

[loanstar]

overdrawing in like borrowing and as far as i know, savings accounts are not meant to have a borrowing facility.

[mom-from-missouri]

I guess I kind of view it as an insurance policy. I don't plan on using it, but its there (and free) if I need it--which has been twice in 30 some years. My bank also automatically transfers the "borrowed" money back into savings when a deposit is made.
Do bounced checks show up on credit reports??? Just wondering-never had one so I didn't know if they did or not.

[sweeps]

But the drawback is you open yourself up to more damage if your account is compromised.

Bounced checks don't appear on your credit report, although they may appear in other databases such as ChexSystems.

[BTC]

No. The answer is: don't try to spend/withdraw more than you have. I've never understood the point or need for overdraft protection. Do you have any idea how much banks collect in overdraft fees every year? Billions of dollars. All money that should have stayed in customers' pockets.

A lot of banks don't charge any more than a finance charge, like a credit card, for overdraft protection. Personally, I like the convenience. One thing I did not like while banking with Netbank is that my overdraft line of credit was not accessible via my debit card. It was only accessible for checks & bill pay. I'm not sure what ING Direct's policy is, but I need to find out.

The bottom line is that I think it's a matter of personal preference and one answer doesn't fit everyone.

[cicy33]

We also have overdraft protection. I think I have had to use it once. A hotel had a hold on our card for a day or two longer than I thought and a check I wrote came through before the hold came off. I wasn't overdrawn, I didn't spend foolishly, I just miscalculated the timing. It happens. And I agree, who carries enough cash to do more than put gas in your vehicle and get something to eat? When I went to my sisters in September I didn't carry more than $100 in cash. and that was because I knew that to fill my tank was about $50. I don't even carry cash as I now have direct deposit. I don't have any credit cards and don't want them so that is not an option. Unfortunately, I don't have a lot saved up but I am working on it. But not everybody has lots of money set aside. The ones that do, great, but the average person doesn't. We are trying to get some money saved up but it takes time and sometimes it seems one thing after another happens. And sometimes people make math errors. I would rather have the overdraft and have my check go through and pay the bank $25 or whatever the fee is then to bounce a check at say walmart and pay them a fee plus my bank. At least this way there would only be one fee. Overdraft should be something that is there in an emergency but definitely not used as a weekly cash fund. I have a friend that constantly is overdrawn. Would drive me crazy!

[Coleroo]

I think it depends on your bank? The only time we ever use an ATM is at the drive up atm at our "personal account" bank (we dont have a savings or overdraft at that one, just the checking).... I have always been of the opinion that it wouldn't let you draw more than you had! Bad opinion!!! we learned the hard way - one day at 5:30 am my husband called me - he was on his way to work and had withdrew his weekly cash allotment from his direct deposit in that account... whoops - we both forgot that we had just rerouted that direct deposit to another bank...and UH OH there was a 0 balance in that account. It was 5:30 am and i was asleep - its a terrible feeling to wake up to "uh oh baby, our atm slip says negative 60$..im sorry i forgot the deposit isnt here anymore". He had to get on to work, so i went to the night deposit by 6:15 with a redeposit. Yet we were still hit with the overdraft fee of 32$ by 8 am. It was only by the kindness of a nice, understanding worker in the bank that the fee was reversed! It was a sickening experience for us both - and we learned really fast that our ATM WILL give us money despite of the account balance.

[Like2Plan]

A lot of folks don't really know what their bank policy is until they actually get charged the fees. It is a service most people don't think they will ever use as I don't think folks start a checking account with the idea of overdrawing their balance. It is usually some sort of mistake.

I read an article recently that said 8 out of 10 of the major commercial banks have this overdraft protection "service". This is another difference between commercial banks and credit unions as the overdraft fees at CU's are typically lower to no charge if you sign up for it in advance (if you have funds in a savings account and it is linked to your checking, they will transfer the money over for no charge or you can set up a line of credit much like a credit card for overdraft protection).

Congress is looking into this, too. According to the article I read banks may be taking steps so that congress doesn't act by doing more disclosure (now there's an idea! ). Some ideas are that folks will have to agree to the fees in writing or be given the option to opt-out. Perhaps, a warning on the ATM machine and the fees that you will incur if you about to go over--much like you have to agree to the fee charged on the ATM now (if there is a transaction fee).

[disneysteve]

I have always been of the opinion that it wouldn't let you draw more than you had!

And that is exactly as it should be. The only reason the bank is now happy to let you spend money you don't actually have is that they get to nail you with a huge fee for doing so. $1.00 over your balance and you pay a $30-$40 fee. Years ago, that wasn't the case. If you didn't have money in the account, you were out of luck. Kept people responsible. We need to go back to that type of system. Same goes for credit cards. You shouldn't be able to charge over your credit limit. What's the point in having a "limit" if you can charge as much as you want? Of course, the point is the company gets to hammer you with fees for doing so.