December 5, 2009
-- by Dave Johnson
So I had dinner at a friend's house last night. She works hard (caring for mentally challenged people in a facility), but of course doesn't make a lot (she only has a Master's degree). She tells a story about how she went to the bank to be sure she had money in the account, they assured her she did, she didn't withdraw anything or write any checks, and a week later she had over $300 in bank overdraft "fees." Her account was very low so they held a check until the account was low enough that it would run out, then took out the large amount, and after that a number of earlier debits were charged, so each of them incurred a large overdraft fee, even if they were for very small amounts.
I am hearing these stories over and over from people who are being charged these outrageous "fees" for using their debit cards, so this bank overdraft fee scam must be just massively widespread. One way the bank scams you by holding all your checks and ATM usage, and then processing the largest first regardless of the order they come in, which means if you are overdrawn you will get a large number of overdrafts instead of just the large one.
You can't do anything about this. They won't just deny the debit, and you cannot get them to turn this off.
Here is the solution: If you do not have a large balance in your account do not use cards for any reason. Use cash. Why let the bank scam you?
Credit cards a nothing but a scam at this point. Never hold a balance on a credit card. They depend on this, and use every trick in the book to make you think it is OK to use a credit card to borrow money. Don't do it, you are just enriching the worst elements.
Posted by Dave Johnson at December 5, 2009 6:29 PM
Why would anyone in their right mind use a commercial bank at this point (other than for a compelling business reason)? Join a local, community-based credit union - they're non-profit, and collectively owned by the members!!! Their goal is to help you, not abuse you - and you deal with actual human beings with the ability to make decisions (or refer you to someone who can). The first thing I did when I married my wife, was get her to stop doing business with Bank of America, and join the Santa Cruz Community Credit Union (where I park my money while it's in transit elsewhere). I've canceled all my credit cards (except for secured cards held through the credit union). There's simply no better deal in town: their fees are lower, their interest rates are higher, the loan rates are lower, they're more flexible on the finances.
So, U.S. Bank is even worse... I hear that they charge people $8 a day if they have a negative balance. And, I hear that Bank of America charges you $35 for an overdraft, and then another $35 two days later if you don't cover it.
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