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New overdraft rules take effect July 1

Discussion in 'The OT' started by phrelin, Jun 14, 2010.

  1. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    I won't even attempt to explain what changes occur on July 1 except to note that it particularly involves debit cards. This MarketWatch piece is almost disturbing:
    Another attempt to explain it is offered in the LA Times article Personal Finance: New overdraft rules and you.
     
  2. Jared

    Jared New Member

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    interesting, thanks.
     
  3. PokerJoker

    PokerJoker Godfather

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    :lol::lol: "valuable safeguard" - yeah, valuable to the banks. A huge portion of their profits in recent years are from debit card overdraft fees. We're talking tens of billions of dollars here. The new law makes it so you have to actually opt in for overdraft protection. The banks are going to try everything under the sun to convince you to keep the protection.

    I have a better idea!

    - Keep track of your balance the old fashioned way, by manually tracking every deposit and withdrawal
    - Do not trust the account balance shown on line or at an ATM!
    - Don't make a deposit and expect to spend that money the same day
    - Don't spend money you do not have! That's what credit cards are for, not debit cards!

    I have removed the overdraft protection from all of my debit cards. I would rather have it bounce than pay the #$%^ fee.

    Keith
     
  4. peano

    peano Icon

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    People still use debit cards?? That I don't understand. Cash I understand and credit cards I understand, but I see no reason to use a debit card.
     
  5. Earl Bonovich

    Earl Bonovich Lifetime Achiever

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    Honestly...

    I probably have received over 10 written notices about this change.... 10 per account (we have two).

    It has shown up on the ATM display screen, for almost transaction the last 2 months.
    It has shown up when I login to the online system, almost daily.

    I for one glad the change is comming so they can stop bugging me about it.
     
  6. kevinturcotte

    kevinturcotte Active Member

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    Some of us don't qualify for credit cards, or if we do, don't trust ourselves with them.
     
  7. dpeters11

    dpeters11 Hall Of Fame

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    I also think that if you go over, and they take money from your savings to cover that they shouldn't charge the fees that some do. My old bank charged up to $15 to use money from your own savings account to cover. That's insane. I'd be OK with overdraft fees if they were reasonable. Maybe a percentage, not a flat $30.

    It can happen, and not necessarily always your fault. I made the mistake of having my mortgage payment come out on pay day. My pay is direct deposit and went in that day, but they took all the debits before the deposit.

    I've since switched to a credit union. Cost to use your savings account? A flat $1 and deposits for the day go before debits.
     
  8. Earl Bonovich

    Earl Bonovich Lifetime Achiever

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    Absolutly... debit card is primary in my household.

    Carry hundreds around in cash around when shopping is a major PITA.
    probably have no more then $40 on average.

    As for Credit Cards... WAY to easy to over spend. I am in the same boat as millions of others, that have had the CC card companies screw them over... and now I am paying for it.

    I would actually say the opposite... of your post.
    Debit Cards to me are just as good as cash... easier to use, more security then cash, accepted just about everywhere (including vending machines).

    They get points and miles just like a credit card does.

    My checkbook hasn't left the house in probably 8 years. I can't even recall the last time I used to pay for a cashier based purchase via a check.
     
  9. dpeters11

    dpeters11 Hall Of Fame

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    The big problem with debit cards is the risk of something going wrong. Getting double charged, fraudulent charges etc. In the past at least, some banks limited the number of challenges to an incorrect charge. Even if they did refund it (and if they refunded any resulting overdrafts), they are not exactly known for speed. You end up having your money tied up for several weeks or more while they do the investigation.
     
  10. Earl Bonovich

    Earl Bonovich Lifetime Achiever

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    I've had a DEBIT card, for at least 8 years now (as I know I had it in my old house).

    I think in that time, I was double charged once at a restuarante (what actually happend is they charged two different bills).

    I check my online statements for all accounts about every other day, just as a habbit to nip things in the bud. Takes about 10 minutes to role through all my online accounts.

    I am with a major bank, and they have multiple protections and I even have debit card protection with my home owners insurance.

    The one time I had to have a reversal of a charge (a wopping $14) they gave me a temporary credit for the $14 during the investigation.

    So obviously each person's scenerio would be different... but I am with one of the big 3 banks, and can't imagine the other big ones being much different.
     
  11. Lee L

    Lee L Hall Of Fame

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    We use a Debit card all teh time. Some places do not take Amex or we just don't think about it. We have had a couple of fradulent charges, but luckily, we are with a really good credit union and they take care of us. I might be a little more hesitant if it was with a mega bank.

    AS far as overdraft goes, we have had it linked to our Savings account for like 15 years anyway. I had not heard a peep about this new rule until this thread. Another perk of being in a credit union, they do not count on fees of the members to make money.
     
  12. AntAltMike

    AntAltMike Hall Of Fame

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    One credit card company hounded me half to to death with messages to call them back that I never answered. Finally, when I called them for something else, they refused to let me speak to anyone about that matter until I listened to their pitch on why I should allow them to continue to process overlimit charges. They offered to do something for me to sweeten the pot, like maybe lower my annual card fee or something, but I declined.

    My checking account debit/credit card issuer, Wachovia, no longer lets me overcharge or overdraft. I went to a gas pump and used that card last week and the pump shut off when my account balance reached exactly zero.

    Previously, Wachovia had screwed me, bigtime. They claim they have the right to alter the posting order of any debits or charges that come in any day to maximize the penalty. One morning, I checked my balance and had a little under $400 in the account. During the day, I made six very small debits (McDonald's, Seven Eleven, CVS) and logged in and saw that they had all been processed as debits and that my balance was down around $350-$360. At 9:00 PM, I serviced a DirecTV SMATV headend and found that the account was shut off due to non-payment. This is for a big customer that has given me over a quarter million dollars worth of business, so I called their Director of Engineering at his home but he said the didn't have his business credit card with him, so I told him I'd put the $390 payment on mine, but that he'd have to pay me a $35 overdraft fee if my bank treated it as an overdraft. Sometimes, if a payment I made was treated as a charge, it wouldn't be posted until a day or two later, so I thought I might still have a chance to "beat the check to the bank", so to speak.

    But not only did it get posted as a debit, the bank then rearranged the order of that day's debits, so that all seven debits were overdrafts and I got bagged for about $250 in penalties. Unfortunately for me I was extremely busy that week and never made time to go to the bank and give them hell.
     
  13. Nick

    Nick Retired, part-time PITA DBSTalk Club

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    Ugh! :eek2:

    At my (small town) bank I've had overdraft protection tied to my savings account for like forever. I almost never OD, but if I do, there is only a small $10 charge in the event an OD triggers an automatic transfer from savings.

    ...................

    ADDED: Opt in - although I have OD protection, but don't ever expect to use it, stuff happens, so I just called my personal banker and told him to opt me in, in the unlikely event that (a) a debit card/ATM a transaction I initiate ever overdraws my checking account, and (b) the balance in my short-term savings accout is insufficient to cover the transfer.

    Even though I look at my accounts online every morning, I don't ever want a transaction to be declined on-the-spot, especially at a restaurant, gas station or ATM. The opt-in, as a back-up to overdraft protection, guarantees that.
     
  14. hdtvfan0001

    hdtvfan0001 Well-Known Member

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    You ain't see nothin yet...

    Proposed regulations in the pipeline will likely make the entire privacy, disclosure, and notifications requirements on most financial transactions get even more ugly than they already are today.

    The Wall Street meltdown 18 months ago is leading to further legislative efforts to cross every "t" and dot every "i" when it comes to money matters.
    Overcompensation for regulation is likely.
     
  15. dpeters11

    dpeters11 Hall Of Fame

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    I've never heard of this one. Many banks process largest to smallest, but they do it consistently. Mine never changed the order around based on scenario. Always largest to smallest. But you don't really notice that it's done that way unless you go over. They called it a feature, saying you wouldn't want your mortgage to bounce.
     
  16. AntAltMike

    AntAltMike Hall Of Fame

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    I've heard them give that lame excuse before, but it didn't apply to my situation. My payment to DirecTV exceeded my opening balance that day by a few dollars, so even as the first fee posted, it wouldn't clear without causing an overdraft. Furthermore, that bank excuse is stale, from the days of manual charge entry. According to the account journal I had pulled up on the internet earlier that evening, the half a dozen small charges that day weren't pending, they were debits that had already been paid.
     
  17. Cholly

    Cholly Old Guys Rule! DBSTalk Club

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    I use my debit card regularly for local purchases, but not for travel. Certainly not for hotel/motel reservations, car rentals and airline ticket purchases, where they'll put temporary blocks of some dollar amount on your card. Best to use credit cards for these instances.
     

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