The new bank overdraft fees

[moneysense]

With banks starting to raise their various fees, and adding new one, let alone cutting the amount of time that will trigger fees for overdrafts, one has to wonder where the Federal Reserve is, since they are the ones that protect customers from this sort of thing.

It is said that these fees are costing customers $17.5B a year now and with more fees and higher fees added on, this number will just keep rising, and these are hard on people with the economy in the shape it is in right now.

One of the problems with overdraft fees, is that before, the banks wouldnt pay something if the money isnt in your account. Now they pay it without your knowledge then charge an overdraft fee if the money isnt in your account.

In todays economy with most everyone having very limited incomes, a couple of these overdraft fees can be devastating.

Perhaps the answer is, not allowing our creditors to take an automatic payment out of our accounts. Instead, send them a check or a money order. You are usually billed by mail and the creditors give you a date by which they need the payment.

You may have a late fee added to your bill if you dont get the payment in on time, but it is a fee that can be paid over time, not due immediately.

But to avoid that, if you are close to the deadline that the check has to be there, send it Over Nite Express, it still ends up being a lot cheaper than an overdraft charge.

[carol b]

We have a new account and it has overdraft protection worth up to $800. It will pay the checks but comes with an overdraft fee of $31 per item.

It is alot of money but the other way costs more. If you dont have it and your check bounces then you owe your banks fee plus the normal $25 that the person you wrote the check to charges.

Its a give and take situation but it seems to me there is more take than give now a days.

[beaston]

The new banking laws go into affect August 15th. You can actually opt-out of any OD stuff with your bank, which basically means that they will NOT honor any charges to be made to your account if the money isn't in there. You can get ahold of your bank to get the details and find out how to opt-out, if you wish. The default for everyone is to be opt'd in...imagine that.

[dimetime]

It is bullshit what banks are doing to its customers. Its sad when a .25 mistake ends up costing you around $30.00 or more depending on your bank.

To me that just doesn't make any sense at all. It's better to deal with cash and money orders than it is to have a bank account. People are in need of money right now and banks are doing what they can to take it away, just like everyone else.

It is getting to be to much and it seems to me that we are not getting help from the government like we should be. It is like those who are supposed to be helping all of us, are only worried about their own pockets and not anyone else's.

I would be nice to see those in government take a huge pay cut, then maybe just maybe they would understand what most people are dealing with on a daily basis and start doing something about it.

Now that would be a sight to see, wouldn't it??

[moneysense]

With the banks making all of the different offers they are to bring in more customers, one would think that they would go the extra mile to keep them.

Having to pay a $30 overdraft fee for a deficit in your account of say $10.00 or less is just what you said, BS.

I would think that the bank would go ahead and pay it and let you know that they did so you could deposit a little extra money in your account to cover that payment.

What will they do when customers start leaving the bank because they found a bank that is willing to go the extra mile for their customers? By that time, its too late for them to change their policies. They've already lost customers and word of mouth would get around preventing new customers from dealing there. So for them it would be a lose, lose situation.

[bigbux]

Well, looks like Wells Fargo got in trouble for these.

Look at this:

T

he ruling detailed the experiences of two Wells Fargo customers who used their debit cards for multiple small purchases, and were then charged hundreds in overdraft fees because the order the purchases were cleared by the bank depended on the amounts. The judge found the customers, who were part of a class action, were not properly informed of the bank's policies on processing payments and were unaware the bank would allow debit purchases to go through when their accounts were overdrawn.

http://finance.yahoo.com/news/Judge-...36279.html?x=0

Looks like Wells Fargo has to pay 203 million Dollars back to customers!

[pennypinch]

As someone said above the new laws for overdrafting take effect on Sunday. If you are someone who doesn't have a lot of money in their checking account (like me) then you probably have been bombarded with overdraft protection information in the mail and via email.

I essentially opted out for the overdraft protection which for me makes more sense.

The now-optional service — which many banks are spinning as a must-have, you'll-never-be-able-to-set-foot-into-your-local-deli-if-you-don't program — isn't cheap. TD Bank, for example, charges $35 per transaction that overdraws an account more than $5, up to five transactions per day. You pay another $20 if your account balance remains negative for 10 consecutive days.

Starting August 15, new Federal Reserve rules will require that banks can no longer automatically cover overdrafts and then levy a fee ($27 on average, per Moebs Services Inc.) as they had been; they'll now need to get customers to opt in. Anyone who hasn't said yes yet – and by the way, we don't think you should – is probably getting a fair share of notices by mail. But some people will be hit harder than others. Banks are employing sophisticated market research to help them identify the best prospects and how to reach them. For example, a study by Nebraska-based company Acton Marketing LLC conducted for bank clients, found that the people most likely to overdraw are white women in their late-30s/early-40s who rent homes in the south, and have annual household incomes of nearly $50,000. Acton is also helping banks market specifically to people who have racked up a lot of insufficient fund fees in the past.

[2cents]

I hate the new fees, too--particularly since even linking your accounts as additional protection comes with added fees as well. I have a checking account that maintains a positive balance, but there are times when things get a bit hairy, like around paydays. I don't see why I can't have my savings account as my back-up if certain payments happen to hit before my paycheck gets directly deposited, and I certainly don't understand why I still get charged a fee for the automatic transfer. I agree with the above post that with all the extra money I'm paying the bank just to keep my balances "safe", I might as well invest it in, say, a really heavy mattress.

[moneysense]

I agree that having your savings account as a backup in case you overdraw your checking account is a great idea, but then the banks wouldnt be able to make all that extra money if they did that.

I remember years ago, when you had a checking account and were a regularly depositing customer, the bank would pay the overdrawn amount as a courtesy to their customers and then all you had to do was remember to deduct that amount from your next deposit.

What happened to the courtesy thing? Anymore they just dont care and its all about money, money, money.

There is a lot to be said about using cash and money orders. Neither one bounces and there no fees attached when you pay bills this way.

[DynoDollar]

What I've noticed about banks and helping their customers; it's mostly the smaller banks that will go out of their way now...

But, even the small banks are being snatched-up by the larger ones and customer courtesy in the money sense is being thrown out the window.

The bank I'm with now has been bought and changed names four times in the past 10 years.
Though I think it may not be changing any time soon, since it's now called Wells Fargo.

If I start getting more charges added to my bank accounts, I will be searching out one of the smaller banks again. And then wait for the same thing to happen to it.