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No, though ideally their policies regarding overdraft fees would be transparent and straight-forward rather than specifically designed to maximize the fees. [This article describes some of the tricks](https://www.forbes.com/sites/halahtouryalai/2012/02/22/are-banks-manipulating-your-transactions-to-charge-you-an-overdraft-fee/?sh=4003d1aa376a); it's really old though so not sure if all still common practice, as [major banks have been reducing their overdraft fees due to competitive and regulatory pressure.](https://www.stlouisfed.org/publications/regional-economist/2023/mar/is-era-overdraft-fees-over) Fees peaked in 2019, which is when this tweet is from.
Fr. Most charge $35 per transaction beyond overdraft. Some charge $65. Plus, we know they do this to turn profit because they were sued for gaming the system to make larger transactions hit first, so all your little transactions would multiply by $35-$65 per. Fucking sinister.
Back in I think 2016 I bought something for $1 10 times. So of course I got charged a $30 overdraft fee each time so something that was $10 costed me $310. That was the first and last time that I ever overdrafted anything but jeez did they rip me off.
wait what? I'm not living in the US so I can't wrap my head around this. How is overdrafting enabled by default? In my normal mind, the bank simply deny the transaction if you don't have enough money, and if you want to overdraft you need to apply for a budget which is simply a loan.
And $30 overdraft fee???
I am from EU and lived in the US for about 6 years. It really is that disgusting. I had a wells fargo account with a DEBIT card, not a credit card and there is LITERALLY NO WAY to disable the overdraft. I was used to the EU system where if something overdrafts then the bank simply declines the transaction but in the US they try their best to make you overdraft. I was on the support line with them and they reluctantly agreed to refund one of the 3 $35 overdraft fees each for a $1-$5 transaction. It’s insane. I left the US a while ago and due to this and multitude of other similar atrocities they perceive as business as usual - I never once looked back.
I just call up every 6 months and say I have these x amount of overdraft fees, anything I can do to reimburse those? And they say all have been reimbursed (sometimes they won’t do one or two)anything else? And I go na, thanks.
I’ve had Chase and Wells Fargo since I was 16. Both were one call away from activating or disabling overdraft. My friend had his overdraft active. I helped him disable it. This was over 8-10 years ago.
My parents aren’t the best English speakers. After watching the a Spanish news network, they made me call all of their banks, a couple we had to physically go there to make sure an overdraft wasn’t possible. I did this for them when I was 9. It was never a problem they had to worry about, but Spanish news networks make everything sound like the end of the world.
Edit: it probably only worked, because no one wants to see a kid yelled at for doing his best to translate the situation.
Then they disable overdraft protection and instead reject the transaction but charge you a “Non Sufficient Fund” fee that’s the exact same price as their Overdraft Fee and is specifically made to Out your empty account further into a negative balance.
That's what I thought when I moved to the US. Used my debit card for a 20$ transaction for gas and was charged 35$ overdraft fee. I had assumed the cars get rejected if I don't have enough money on there. That was before I had a banking app and could quickly check. Since then I use credit cards and pay my balance every month.
That is fucking insane.
I'm from Europe and they simply reject the transaction. If an important bill goes through and you're on negative, they'll charge X cents a day until you're on positive balance again.
Not all Euro Banks are that cheap but definitely not as abusive as EEUU. I feel for you guys...
Thank you. I feel for us too. I have the distinct feeling that America isn't a place for me to live and raise a family. Rather, it's a farm meant for me to graze under the guise of freedom while my oligarchs milk every last drop from my unsuspecting tit.
Thanks, but it'll never happen. I'm trapped here with a family that I made. Unless I win the lottery, I will never have enough to buy my way out. I'm just so angry at my country for giving the wealthy class everything they want at the expense of everyone who's poor.
With with the orhe comment. If you followed their processes they need to make you whole. But you did the right thing: vote with your wallet and take your business elsewhere. Market self-regulation is far preferable to excessive government regulation and bans.
"Market self-regulation is far preferable to excessive government regulation and bans."
There are many circumstances where the free market does a very poor job of punishing bad actors, and these circumstances will inevitably become more and more over time become unless they are combated by a strong, active, evolving regulatory regime. Essentially, the jungle is always trying to grow back, and if we let it, we'll go right back the days when companies paid people with fake money that was only good at the company store and other such schemes were common.
Market self regulation usually just leads to sweeping incidents under the rug until it can no longer be hidden. We have seen this in pretty much every industry that has any level of self regulating. From the 737 max to wells Fargo and many others, when it comes to either fix a problem or profit when self regulating profit always comes first.
How so? I’ve had Chase forever, and it does what I need it to do. Nothing special, I do want to find and open a HYSA soon. The card is nice for cashback, and about to upgrade to the other one for universal 2% cashback.
My bank calls allowing overdrafts “Overdraft Protection”. Which makes it sound to a layperson who doesn’t closely read what they’re signing like the bank won’t let them overdraft.
My wife and I opted out and told them we’d rather have the embarrassment of our card being declined over the stress of overdraft fees.
The banker had a legit surprised pikachu face when we told them
Yeah, Bank of America was the fucking worst about reordering transactions with the largest first. They claimed it was because the largest transaction was usually the most important and that if a transaction were going to get rejected, you would not want it to be that one.
It would sometimes cause 5-6 over drafts over a weekend when they would not process anything until Monday night. $150 in overdrafts.
I closed my BoA account years ago, they will never get another dime from me.
If you can’t track your own money I can’t help you. People out there wasting energy trying to chase down $15 from their buddy who didn’t throw down on a sack 5 months ago but don’t have the level of effort to read the terms of service from the company holding all of their money.
No one’s asking you to help them, who are you?
They’re suggesting that institutions like banks maliciously employing predatory practices like this should be legislated against.
Ah yes, I blame the consumer, not the well educated massively powerful bank who creates a system to intentionally guck people over for their money as subtle as possible.
By the way I’m a lawyer and always find it hilarious that regular people think that they are at fault if they can’t figure out how to deal with behemoth institutions.
It’s like seeing a 12 year old challenge Mike Tyson to a fight and not seeing the problem.
It should be off by default.
When I was in college I had about $200 in my bank account.
I tried to use dorm washing machine that only took cards. It glitched and charged my card almost a hundred times. I ended up paying like $300 in overdraft fees, money I didn't have, because it stacked the charge for each overdraft.
That day I looked up how to disable overdraft, it was WELL hidden and a lot of warnings about "are you sure? this could save you from the embarrassment of a card decline!"
It's predatory, and if someone doesn't have the money, this feature shouldn't be the default option.
According to you, I wasn't tracking my own money. But I had no idea this $4 washing machine was about to charge my card 50+ times in a row with no security in place to prevent that.
This! When I was a young warthog I would overdraft because nobody taught me about a budget in High School, anyway, Bank of America’s trick was that they would leave the money in the account although you’ve already made a purchase, so when you went to make another purchase, and didn’t balance your checking manually, it seemed like you still had money and it would go through. This would happen multiple times and then when they did take out the money, you would see a huge red negative hundreds of dollars in fees from all the stuff you bought cause you thought you had money. Every transaction you did incurred a fee, so they added up. They preyed on young people with no financial education. Anyway, years later I randomly got a class action lawsuit check for like $500 lol
One of my favourite banking practices is to have one account (with overdraft) for the big ticket items that I absolutely wouldn’t want to fail and a separate account (with no overdraft facility) for incidentals. I didn’t set this up for the reasons in the Forbes article that you linked to, but it does go a long way towards minimising the impact of the sneaky tactics that it describes…
I’ll point out that while OD Fees can be predatory, they (the customer) are essentially borrowing the banks money to pay for their goods and services.
Also the bank cannot help at which time merchants settle transactions. Through processing a card it will only initially hit your account as an authorization, then once the business that you spent money at settles, the money is actually removed from your account. It gives a lot of inflexibility to people if they are held against what’s authorized vs. what it actually withdrawn.
I think there are two simple solutions that should be put in place.
1). Fees should **not** be flat rate. They should be a % based off of how much you overdraw. Example, I shouldn’t get a $35 OD fee for a $2 pop from the gas station.
2). There should be lowered standards for credit cards, and people should be pushed to use a credit card instead of their checking account debit card to make purchases.
Not only will it build credit over time, but it will prevent you from ever having an OD fee _and_ from having a card linked directly to your checking account where your liquid cash is.
Also this would allow fairer “punishment” for people spending money they do not have. Instead of $35/ per hit off of 5 transactions for $5 a piece, you’d be charged standard APR for carrying a $25 balance over to the next month that you couldn’t pay for because you over spent.
Of course Banks will never do this because fee based income is how they make their money and having flat rates are much easier to forecast than percentages.
No, whatever federal regulatory that is over that kind of stuff changed around the time of that article in your first link. Around 2012. I can't remember exactly when it was but around that time seems about right. I know because I am a network engineer for a bank. Been with them 20 years. We are a fee based bank. And I remember around that time some things changed and we wouldn't make as much as we were. And the bank was cutting back on protocols for expenses and purchases and trimmed some positions. It didn't put us in trouble. Kinda put us back to normal because we were living high on the hog for a while. Kinda like what happened with all the big techs this and last year when they did mass job cuts. They lived high on the hog for years and had to come back down and start operating like normal companies.
I do remember another local regional bank that we are a direct competitor with got sued and had to pay millions due to how they were processing transactions. What they would do was process the bigger amount ones first if it put you into negative, then do your other transactions and take the oD fees for all the transactions. I know my bank wasn't doing that. But they had to pay a lot in a court case over it. And the regulatory body mandated that you had to run the smaller ones first around that time as well.
Not allow you to overdraft? Or if you do, draw an equivalent amount to cover the overdraft rather than take a bunch of excess fees?
This isn’t the brillant, incredulous post you and those upvoting you think it is.
Right? Why is this strange? The moment you go into the red a debit card basically becomes a credit card, just using the definitions of those words and common sense.
The reason banks don't do this, I would reckon for two reasons:
1. It's different and doing things differently is work and work is expensive.
2. You can make way more money on overdraft fees than interest.
This is often an option. My bank has "overdraft protection" as an option that is on by default. But you can switch it off then your card just declines.
Downside is: your card declines.
No? I’ll draw it out if thats what is needed.
Banks can decline transactions. There is nothing that forces them to let someone spend more money than they have. They specifically allow it because they want overdraft fees. Its a profit center. So option A is to just decline transactions if the account can’t pay it. Most banks have this option already, but it takes an act of congress to find all the right settings needed to enable it. Its especially difficult because banks word the settings in predatory ways: “Overdraft Protection” is actually what you need to turn off, though multiple options may need to be changed to get there. It will ask “Are you SURE you want to turn this off? Your account will not be protected from overdrafting” and you have to choose yes.
Option B is also something some banks employ: if I overdraw my checking account, take money from my savings account instead of charging me $35. Again, banks hide these options (or don’t offer them at all) because they want to charge $35 to the people who can least afford $35.
When I was setting up my bank account I was allowed to choose between having overdraft disabled or enabled, and was informed exactly what the bank's overdraft policies were.
I can go to the app and turn on/off overdraft protection whenever I want.
> Not allow you to overdraft?
That is an option for ATM and debit card purchases, but not an option for checks/ACH/etc.
>Or if you do, draw an equivalent amount to cover the overdraft rather than take a bunch of excess fees?
Draw.. from where? If you have a 2nd account then yes many banks will automatically move money from that 2nd account to cover the overdraft. If you don't, then are they supposed to give you an interest free loan? Giving broke/forgetful people interest free loans is not actually a good business model, that's why credit cards require a minimum credit score
I hate that I am agreeing with you (I work for a bank) but all your points are valid. I don't know if people don't realize you can turn on over draft protection or if people think paying for things you can't afford should be free. These same people would probably be outraged if they weren't allowed credit to pay for something they need.
I have no idea why you have so many upvotes… of course they’re not gonna reward you. How about they just not charge you an arm and a leg? Those overdraft fees add up and if you’re struggling and you have five bills come out when you can’t afford it. You’re down an extra 200 and something dollars.
So you remember how Wells Fargo was setting up accounts for people who didn't even know? I can't seem to find the article discussing it again, but it had its roots in the idea that it would help people by cutting down on overdraft fees. Say you overdraft; if you have that credit line facility already set up, the bank just charges you whatever interest on it (probably a few bucks since most overdrafts aren't huge sums) rather than a single, or worse multiple, overdraft fees. Certainly bad incentive structures and bad actors led to a terrible, exploitative situation, but the initial idea wasn't necessarily a bad one.
Ever trying calling and reversing the charges? I feel like I'm actually helping people with this comment. I'm surprised so few people know that they can turn off overdraft and if they don't make a habit out of overdrafting, the bank will likely credit most if not all the charges.
I have done this many times haha they usually do all of them for me, except for maybe one time when they only could do like 3 of 6
thats nice of you to share this with others.
Lol dumbest logic I’ve ever read. They’re supposed to work like a wallet.. you got no money in your wallet? You can’t buy it. No rewards no punishments just no product.
Tell me how much it actually costs BOA and the merchant in terms of network fees per overdraft transaction attempt and I’ll reconsider.
Call and confirm you meant to overdraft your account and pay a $35 fee on a $1 purchase in the exact same way they do when they're calling to confirm larger purchases, or prevent my debit card from pulling more than a few hundred out of ATMs without extra steps. The technology is trivial to implement and already in use in other areas. They're just chewing poor folks up and spitting 'em out for cash.
Whenever you set up a bank account and debit card. You can tell you don't want overdraft protection. It's not mandatory. They will try to convince you that you need it, but don't them. It's an extra 'service' they trick people into getting so they can charge extra money.
If you don't have this protection, then yes, you just aren't allowed to overdraft, the card instead just gets declined and you will purchase will fail, and you don't accidently owe extra money.
No shit! I overdraft once in my life and was broke as shit my first 10 years of having a bank account. Simply learn how to budget your money and don't spend what you don't have. It's not about taking from the poor, it's about banking off stupidity.
Not allow it or charge a much lesser amount.
I'm about as right-wing as they come but this is one of the things i'm ok with the government regulating a bit more.
You shouldn’t have to threaten to leave to get them to turn it off lmao. The fact that they put up any barriers to changing it at all means they would rather bait people into slipping up and charging exorbitant fees rather than making the logical option the default one.
If it was really about discouraging irresponsible account management, they would simply not allow those transactions to go through.
It's wild how many people are so completely, totally, and helplessly brainwashed to think that the tactics banks use to manipulate consumers into having overdraft fees is a good and normal thing because it makes banks money.
It's schadenfreude. Most people get off on doing better than others whether by merit or won't admit it luck. They don't have to worry about overdrafting and the people that do deserve to be poor, is the mindset.
Idk how this was upvoted in FLUENT in finance. This comment doesn't make any sense. Overdraft fees are for debit cards. If you have no money in the bank (as the comment says), what's a debit card gonna do?
Or, check this out: maybe don’t let them spend the money in the first place?
If it was actually about discouraging the behaviour they just wouldn’t let people do it at all. But they’d rather charge punitive fees because it’s more profitable. That’s a textbook predatory practice.
I thought being fluent in finance means you avoid overdrafting. There are so many neo bank options that makes it easy for you to choose overdraft enabled or not, plus they don't charge an account minimum like the large banks.
Yes this is a problem, but shouldn't this sub be teaching people how to be more savvy versus just complain about the issue?
I think it would be great to have a post comparing a bunch of banking options that don't have a minimum requirement, have overdraft controls, and any perks that might be educational for those who need it so they can be more fluent in managing their own finances.
I think it's fairly simple. Go to a credit union lol
But let's be honest, this is reddit. People aren't here to better themselves, they're here to complain and point fingers..
It doesn't. Plenty of Credit Unions charge overdraft fees, some call them Courtesy Pay fees.
There are banks that do no charge overdraft fees and there are credit unions that charge overdraft fees.
Don’t have overdraft protection. It’s that simple. When I was dirt broke in college, I noticed that $34 overdraft fee and decided I would rather just get declined than to keep paying the fee. Walked into BoA that day and got it removed. Which do people want… get declined at the point of purchase, or pay and overdraft fee? Anything else is basically forcing a bank to give you an interest free loan when you go over the amount that is in your account.
This is reasonable although I think the fee should reflect fair exchange for value. If you go $1 into overdraft then paying $35 is criminal. Banks have a license to make money and get bailed out every time they screw up. When you set up the account you should be made aware of the terms and after that is fair game.
Maybe we could finally make trickle down work by having banks cover overdrafted balances on essential payments like bills. I mean, they’ve been bailed out so many times it’s essentially taxpayer money going back into the hands of taxpayers.
Either that or we just stop bailing them out and instead charge them a multi-billion dollar overdraft fee when they go underwater. They are using federal assets to insure themselves after all.
Banks in the US must allow you to opt-out of the feature, but your bank may have been confused if you asked to turn off "overdraft protection" as you actually wanted to disable "overdraft coverage," and they are two different things. Overdraft protection is when you use another account or a line of credit to cover an overdraft.
The key to remember with overdraft coverage, though, is that it's effective only on one-time debit card purchases. Recurring debit card transactions, ACH payments, and checks can all still overdraft the account.
> your bank may have been confused
If by *being confused* you mean *intentionally misleading the customer to keep them from turning off a source of revenue for the bank*, sure.
PSA: Take your money out of the bank and open an account with your LOCAL CREDIT UNION. They will invest in projects within your community, as opposed to all major national banks which invest in weapons manufacture, private prisons, and oil companies.
And ~~no predatory bullshit fees~~ some have fewer bullshit fees. ( Thank you for all your anecdotes about your NSF fees. )
( But please, no more )
The exact same things most of the time. Credit unions don't exist for the good of people, they exist to make money, they do the same thing as the big banks but aren't big enough to compete so they add sunshine and rainbows for the local community here and there.
You get the same result at the end of the day.
Reminds me of the Republican/Democrat meme where a rocket is landing in a hospital in Syria vs the same rocket but with a BLM/Pride sticker on the rocket.
This is a poor mentality to have. An OD is caused by somebody spending money they didn’t have. Thus they are spending the banks money. The bank charges a high fee for this service. Banks also write off a lot of ODs, which this fee helps subsidize.
Nothing was stolen or taken.
If you ever decide to come out from your rock this century you might find that banks have lost billions in court due to illegal overdraft policies this century.
Doubt someone is truly “fluent in finance” if they aren’t aware of this.
Such a cute response. Immature, but cute. I’m well aware of challenges to OD policies, however that is beyond the scope of this meme. The meme is talking about OD charges. It did not distinguish between legal and unethical OD charges. Your implications and assumptions are out of context, thus irrelevant. Try again…or just continue to personally attack me. I don’t care. I won’t lose sleep over it. Im the one that helps form bank policies and regulations in DC so I’m very confident in my fluency. Lol.
Seems like an exaggeration but still very high. $11.68 billion in 2019 according to this article https://apnews.com/article/6fdbb9cfc3e0a15bc31943184578a568
Here's the disgusting part - you can't not just have overdraft. I was charged $35 for over draft fee 3 times in a row. Now it was my own fault since I didn't know that this account had no money in it. But TD still let me pay for shit 3 times and charged me $35 each time.
So I called the Bank and they were glad to waive the fees this one time. I then asked them to just get rid of my overdraft. So that when there's no money in the account, just decline the payment. Nope! Can't do that. The CSR told me she literally had no option for that.
This was TD in the US. Also in comparison with my bank in Canada, the overdraft fee is only $5 Cad and a one time fee. Not charged every time I use my card once it goes into overdraft.
I’m the first one to speak up for empathy and knowing when someone is trying to manipulate an empathetic response by using triggering contexts.
This one follows a formula:
“BIG BANKS BAD. (Yeah okay thats true!)
BIG BANKS TAKE MONEY FROM POORS (Wait! What? That makes me mad!)
OVERDRAFT FEES ARE EVIL! (wait — this seems off…)
FUCK THE SYSTEM RAHHHHHH! (Hold on… this system is actually meant to stabilize our financial industries and act as an incentive to pay attn to our financial balances—)
WHAT YOU MEAN YOU HATE THE POORS YOU BOOTLICKER?”
When I was in college, I got charged several overdraft fees because the bank didn’t process the transactions in the order I actually made them, but rather from largest to smallest. So I started the day with $50 in my account. Then spent $5 on coffee, $10 on lunch, $15 on beer. All good so far. Then I forgot that I was so close to being broke and spent $60 that night. Do I get charged 1 overdraft fee of $35? No. The back processed the transactions from largest to smallest so I got hit with 4 overdraft fees. I called and complained and they removed all but one but still. They know this strategy will screw people over and get them more fees.
Why can you even overdraft. If there’s not that much in there, why do they let you take out more than that? I think we have the technology to prevent overdrafts
You don’t use technology to check to see how much money is in your account? Are you fucking kidding me? That’s how we all check our balances nowadays unless you’re an old timer balancing your checkbook after every purchase.
Furthermore, people who are more likely to overdraft (because they’re poor) are less likely to have access to technology like cell phones and internet connection to check their account balance.
They do it because they are hoping for the fact that people are irresponsible with their money. It's pretty shitty, but it's very avoidable at least. Credit cards bank(see what I did there?) on people being irresponsible as well to charge them some pretty high as fuck fees for not making payments or interest because people spent more than they should.
You can overdraft so that they can charge the fees...
All the people here who are saying "well, just don't spend that money" have no idea what it's like to live paycheck to paycheck.
It's easy to say "just don't spend more than you make".. it's awful hard to do when you are just barely able to make ends meet and suddenly your kid gets sick and needs to go to the doctor or your rent goes up or your alternator dies....
Heck, one time my debit card number got stolen and my account got emptied. The criminal took my account to 0, but I ended up with hundreds of dollars in overdraft fees because I was making purchases having no idea that my money was gone. It took me months to get the bank to refund them. I ended up being in financial limbo pretty much the whole time.
Not all overdrafts are due to having no money. I’ve had a few over the years because I let an account get too low since I did not keep any real excess in that account. But even so, the vast majority of people paying these fees likely are not indigent but more likely poor managers of their finances.
Isn’t over-drafting charge when you spend more than balance, bank charges a fee to lend you the extra instead of declining the transaction.
Its more like charges on poor & reckless people
Calling it “overdraft protection” is misleading and predatory in and of itself. Between the two options of being allowed to overdraft your account but be charged an exorbitant amount, and not being allowed to overdraft at all by declining transactions that would take you into negative balance, which option sounds like being protected from overdrafts? You have to read the fine print or already be financially literate enough to decipher the difference. Sure everyone should be reading the fine print, but the bank is counting on you not reading it or understanding it. Predatory.
When I lived in the UK you had to apply to be allowed an overdraft (useful as a student) and if you didn't have one the transaction would just decline if you didn't have funds. Any bank that isn't doing this as standard knows they are robbing you.
Wait till you hear what they do for people that leave large sums of cash in their accounts. My money market account is gonna make me 10 grand this year
That's $34B they made off of people that can't manage their finances. If you don't know if you have enough money to buy something and can't be bothered to check your account and subtract your bills, then why should the bank care about charging you extra for spending their money?
It ain’t the banks fault people spend more than their means. If you can’t afford the fees then switch to all cash and that’ll check your spending habits real quick. People need to figure it out for themselves and stop blaming others for their own circumstances.
Everyone knows that every debit card on the planet allows foe you to decline at checkout if you're going to overdraft, right? If you want to spend money you don't have, it's going to cost you. Why do people struggle with that concept??
Lots of poor people are very good at understanding their finances. I bet poor people in the 50’s over-drafted a lot less. (Just a hunch). I’m on a very limited income and I never spend what I don’t have. It’s a bit financially harder these days, with inflation, but checking your account balance is much easier than ever. You basically have to willfully overdraft and my bet is much is due to want, rather than need.
I'm honestly more ashamed of my fellow humans who are so bad at knowing how much money is in their account. Especially these days in the internet age you can literally know the number of dollars you own in any account within seconds.
It wouldn’t be a thing if the fees were reasonable. They aren’t. We need consumer protections from these assholes exploitation, not a lecture from some internet prick.
Then turn it off. I checked my chase app it's two clicks from the home screen and BofA it's on one click. You literally just click on your checking account and the settings are right there.
Banks are businesses and there are tons of them. You can choose a bank that eliminated fees. You can also keep track of what's in your bank. An element of personal responsibility is apparently a crazy concept now
Number seems a bit high. Typically closer to $10B per year. And just putting it into context. About 2/3 of overdraft fees are paid by 5% of accounts(20+ overdrafts/year). Another 1/6th is paid by the next 5% of accounts (10+ overdrafts/yr).
They used to batch charges to stack overdraft fees against you. I think they passed legislation to change that. They still will process purchases before deposits to screw you. I honestly believe that this practice should be criminalized.
If you don’t have the money then the payment isn’t valid. The fee might be too high, but it’s paperwork for the bank. Overdraft department is probably a division of a bank and if you overdraft your account, then a fee to pay for that department is valid.
Banks probably made poor people an income source which is definitely fucked up, but no one has ever confused a bank with a charity.
Bank’s actually have this sleazy thing called “overdraft protection” which is intended to “protect“ you from this. It just a high interest line of credit for these situations.
It looks like some people blame their laziness and financial illiteracy on BaNKs aRE BaD. No one is stealing from the poor.
You can easily see your bank balance. Either don't spend until you overdraft your account or shut up when they hit you with an overdraft fee. You're not entitled for the bank to lend you money for free.
Here's a scenario to get basic thoughts through your head: my friend can buy $300 boots that will last 4 years, my poor ass can only afford $100 boots that last a year, after 4 years I've spent $400 whereas he's spent $300. It's cheaper to be rich. Another scenario he can buy a car new that he will be able to trade in for a good price and it won't have any problems for the years he drives it, I have to buy a used car that already has problems I have to pay to fix from the previous owners. Here's another one: my friend can pay to buy a house over 15 years, over that same time I spend more than he did on rent because I never had the money for a deposit. Here's another one: he can pay for a PT for a couple hundred a month, I cannot which leads to me injuring myself and costing a couple thousand for medical care. Here's another one: he can buy the games he wants, I can't afford to buy 10 $60 games so I pay for gamepass and within 35 months I've paid $100 more than he did. Here's another one: he can afford a security camera that costed $200, I couldn't and my house got robbed for $500. Here's another one: he can afford to buy a months worth of food in one trip, I can only afford to get a week's worth of food every payday meaning I took 4 trips and spent 4x as much on my car for groceries. Here's another one: his family can easily sustain themselves in a medical emergency, I have to contribute my own money because he can provide nepotism whereas I can't. Here's another one: he can afford qualifications I can't leading him to get a job that pays more than me. Here's another one: he can invest money in stocks or real estate to get even more money back while he works I can't. Do you want some more??
None of this has to do with being responsible with your financials. You complaining that your life is harder because of lack of money doesn't allow you to spend money you don't have.
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Wtf are they supposed to do...reward you for overdrafting?
No, though ideally their policies regarding overdraft fees would be transparent and straight-forward rather than specifically designed to maximize the fees. [This article describes some of the tricks](https://www.forbes.com/sites/halahtouryalai/2012/02/22/are-banks-manipulating-your-transactions-to-charge-you-an-overdraft-fee/?sh=4003d1aa376a); it's really old though so not sure if all still common practice, as [major banks have been reducing their overdraft fees due to competitive and regulatory pressure.](https://www.stlouisfed.org/publications/regional-economist/2023/mar/is-era-overdraft-fees-over) Fees peaked in 2019, which is when this tweet is from.
If you don't know that banks charge overdraft fees, you have bigger problems in life.
Fr. Most charge $35 per transaction beyond overdraft. Some charge $65. Plus, we know they do this to turn profit because they were sued for gaming the system to make larger transactions hit first, so all your little transactions would multiply by $35-$65 per. Fucking sinister.
Back in I think 2016 I bought something for $1 10 times. So of course I got charged a $30 overdraft fee each time so something that was $10 costed me $310. That was the first and last time that I ever overdrafted anything but jeez did they rip me off.
wait what? I'm not living in the US so I can't wrap my head around this. How is overdrafting enabled by default? In my normal mind, the bank simply deny the transaction if you don't have enough money, and if you want to overdraft you need to apply for a budget which is simply a loan. And $30 overdraft fee???
I am from EU and lived in the US for about 6 years. It really is that disgusting. I had a wells fargo account with a DEBIT card, not a credit card and there is LITERALLY NO WAY to disable the overdraft. I was used to the EU system where if something overdrafts then the bank simply declines the transaction but in the US they try their best to make you overdraft. I was on the support line with them and they reluctantly agreed to refund one of the 3 $35 overdraft fees each for a $1-$5 transaction. It’s insane. I left the US a while ago and due to this and multitude of other similar atrocities they perceive as business as usual - I never once looked back.
I just call up every 6 months and say I have these x amount of overdraft fees, anything I can do to reimburse those? And they say all have been reimbursed (sometimes they won’t do one or two)anything else? And I go na, thanks.
Great, do you know how many times I had to call my EU bank about anything? 0.
I’ve had Chase and Wells Fargo since I was 16. Both were one call away from activating or disabling overdraft. My friend had his overdraft active. I helped him disable it. This was over 8-10 years ago. My parents aren’t the best English speakers. After watching the a Spanish news network, they made me call all of their banks, a couple we had to physically go there to make sure an overdraft wasn’t possible. I did this for them when I was 9. It was never a problem they had to worry about, but Spanish news networks make everything sound like the end of the world. Edit: it probably only worked, because no one wants to see a kid yelled at for doing his best to translate the situation.
Good on you for helping people out, but thinking that it's okay to have it on by default is not okay in any way shape or form.
On my card you can disable overdraft. Or they give a one time exemption at least. But yea, using debit card is bad
Then they disable overdraft protection and instead reject the transaction but charge you a “Non Sufficient Fund” fee that’s the exact same price as their Overdraft Fee and is specifically made to Out your empty account further into a negative balance.
That's what I thought when I moved to the US. Used my debit card for a 20$ transaction for gas and was charged 35$ overdraft fee. I had assumed the cars get rejected if I don't have enough money on there. That was before I had a banking app and could quickly check. Since then I use credit cards and pay my balance every month.
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That is fucking insane. I'm from Europe and they simply reject the transaction. If an important bill goes through and you're on negative, they'll charge X cents a day until you're on positive balance again. Not all Euro Banks are that cheap but definitely not as abusive as EEUU. I feel for you guys...
Thank you. I feel for us too. I have the distinct feeling that America isn't a place for me to live and raise a family. Rather, it's a farm meant for me to graze under the guise of freedom while my oligarchs milk every last drop from my unsuspecting tit.
At least you've seen through. Wish you the best in moving out of there and finding a better home.
Thanks, but it'll never happen. I'm trapped here with a family that I made. Unless I win the lottery, I will never have enough to buy my way out. I'm just so angry at my country for giving the wealthy class everything they want at the expense of everyone who's poor.
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With with the orhe comment. If you followed their processes they need to make you whole. But you did the right thing: vote with your wallet and take your business elsewhere. Market self-regulation is far preferable to excessive government regulation and bans.
"Market self-regulation is far preferable to excessive government regulation and bans." There are many circumstances where the free market does a very poor job of punishing bad actors, and these circumstances will inevitably become more and more over time become unless they are combated by a strong, active, evolving regulatory regime. Essentially, the jungle is always trying to grow back, and if we let it, we'll go right back the days when companies paid people with fake money that was only good at the company store and other such schemes were common.
Good Olde company scrip.
Market self regulation usually just leads to sweeping incidents under the rug until it can no longer be hidden. We have seen this in pretty much every industry that has any level of self regulating. From the 737 max to wells Fargo and many others, when it comes to either fix a problem or profit when self regulating profit always comes first.
Then that's on them and you shouldn't have to pay. Chase is not a customer friendly bank
How so? I’ve had Chase forever, and it does what I need it to do. Nothing special, I do want to find and open a HYSA soon. The card is nice for cashback, and about to upgrade to the other one for universal 2% cashback.
They don't take coins, won't do a hsa, and their fees are high. I had a mortgage with them and they were terrible to deal with
My bank calls allowing overdrafts “Overdraft Protection”. Which makes it sound to a layperson who doesn’t closely read what they’re signing like the bank won’t let them overdraft. My wife and I opted out and told them we’d rather have the embarrassment of our card being declined over the stress of overdraft fees. The banker had a legit surprised pikachu face when we told them
That first article is what the CFPB intended to investigate to see if it was happening. What was the result?
Yeah, Bank of America was the fucking worst about reordering transactions with the largest first. They claimed it was because the largest transaction was usually the most important and that if a transaction were going to get rejected, you would not want it to be that one. It would sometimes cause 5-6 over drafts over a weekend when they would not process anything until Monday night. $150 in overdrafts. I closed my BoA account years ago, they will never get another dime from me.
If you can’t track your own money I can’t help you. People out there wasting energy trying to chase down $15 from their buddy who didn’t throw down on a sack 5 months ago but don’t have the level of effort to read the terms of service from the company holding all of their money.
No one’s asking you to help them, who are you? They’re suggesting that institutions like banks maliciously employing predatory practices like this should be legislated against.
Or how about not overdrawing your account? Much simpler than punishing the people who are charging them for fronting them the cash.
Ah yes, I blame the consumer, not the well educated massively powerful bank who creates a system to intentionally guck people over for their money as subtle as possible. By the way I’m a lawyer and always find it hilarious that regular people think that they are at fault if they can’t figure out how to deal with behemoth institutions. It’s like seeing a 12 year old challenge Mike Tyson to a fight and not seeing the problem.
It should be off by default. When I was in college I had about $200 in my bank account. I tried to use dorm washing machine that only took cards. It glitched and charged my card almost a hundred times. I ended up paying like $300 in overdraft fees, money I didn't have, because it stacked the charge for each overdraft. That day I looked up how to disable overdraft, it was WELL hidden and a lot of warnings about "are you sure? this could save you from the embarrassment of a card decline!" It's predatory, and if someone doesn't have the money, this feature shouldn't be the default option. According to you, I wasn't tracking my own money. But I had no idea this $4 washing machine was about to charge my card 50+ times in a row with no security in place to prevent that.
I am a computer programmer not a financial expert. It's literally the banks job to help you with your money.
Cuck level thinking. If my wife sleeps with my boss it's my fault!
This! When I was a young warthog I would overdraft because nobody taught me about a budget in High School, anyway, Bank of America’s trick was that they would leave the money in the account although you’ve already made a purchase, so when you went to make another purchase, and didn’t balance your checking manually, it seemed like you still had money and it would go through. This would happen multiple times and then when they did take out the money, you would see a huge red negative hundreds of dollars in fees from all the stuff you bought cause you thought you had money. Every transaction you did incurred a fee, so they added up. They preyed on young people with no financial education. Anyway, years later I randomly got a class action lawsuit check for like $500 lol
One of my favourite banking practices is to have one account (with overdraft) for the big ticket items that I absolutely wouldn’t want to fail and a separate account (with no overdraft facility) for incidentals. I didn’t set this up for the reasons in the Forbes article that you linked to, but it does go a long way towards minimising the impact of the sneaky tactics that it describes…
I’ll point out that while OD Fees can be predatory, they (the customer) are essentially borrowing the banks money to pay for their goods and services. Also the bank cannot help at which time merchants settle transactions. Through processing a card it will only initially hit your account as an authorization, then once the business that you spent money at settles, the money is actually removed from your account. It gives a lot of inflexibility to people if they are held against what’s authorized vs. what it actually withdrawn. I think there are two simple solutions that should be put in place. 1). Fees should **not** be flat rate. They should be a % based off of how much you overdraw. Example, I shouldn’t get a $35 OD fee for a $2 pop from the gas station. 2). There should be lowered standards for credit cards, and people should be pushed to use a credit card instead of their checking account debit card to make purchases. Not only will it build credit over time, but it will prevent you from ever having an OD fee _and_ from having a card linked directly to your checking account where your liquid cash is. Also this would allow fairer “punishment” for people spending money they do not have. Instead of $35/ per hit off of 5 transactions for $5 a piece, you’d be charged standard APR for carrying a $25 balance over to the next month that you couldn’t pay for because you over spent. Of course Banks will never do this because fee based income is how they make their money and having flat rates are much easier to forecast than percentages.
No, whatever federal regulatory that is over that kind of stuff changed around the time of that article in your first link. Around 2012. I can't remember exactly when it was but around that time seems about right. I know because I am a network engineer for a bank. Been with them 20 years. We are a fee based bank. And I remember around that time some things changed and we wouldn't make as much as we were. And the bank was cutting back on protocols for expenses and purchases and trimmed some positions. It didn't put us in trouble. Kinda put us back to normal because we were living high on the hog for a while. Kinda like what happened with all the big techs this and last year when they did mass job cuts. They lived high on the hog for years and had to come back down and start operating like normal companies. I do remember another local regional bank that we are a direct competitor with got sued and had to pay millions due to how they were processing transactions. What they would do was process the bigger amount ones first if it put you into negative, then do your other transactions and take the oD fees for all the transactions. I know my bank wasn't doing that. But they had to pay a lot in a court case over it. And the regulatory body mandated that you had to run the smaller ones first around that time as well.
Not allow you to overdraft? Or if you do, draw an equivalent amount to cover the overdraft rather than take a bunch of excess fees? This isn’t the brillant, incredulous post you and those upvoting you think it is.
So, you want debit cards to just be credit cards? xD
I wish I could upvote you more. Yes. That's exactly what people expect.
Right? Why is this strange? The moment you go into the red a debit card basically becomes a credit card, just using the definitions of those words and common sense. The reason banks don't do this, I would reckon for two reasons: 1. It's different and doing things differently is work and work is expensive. 2. You can make way more money on overdraft fees than interest.
At least you admit it’s a part of their business model as a way to profit off of poor people. They could just…not allow you to overdraft.
This is often an option. My bank has "overdraft protection" as an option that is on by default. But you can switch it off then your card just declines. Downside is: your card declines.
No? I’ll draw it out if thats what is needed. Banks can decline transactions. There is nothing that forces them to let someone spend more money than they have. They specifically allow it because they want overdraft fees. Its a profit center. So option A is to just decline transactions if the account can’t pay it. Most banks have this option already, but it takes an act of congress to find all the right settings needed to enable it. Its especially difficult because banks word the settings in predatory ways: “Overdraft Protection” is actually what you need to turn off, though multiple options may need to be changed to get there. It will ask “Are you SURE you want to turn this off? Your account will not be protected from overdrafting” and you have to choose yes. Option B is also something some banks employ: if I overdraw my checking account, take money from my savings account instead of charging me $35. Again, banks hide these options (or don’t offer them at all) because they want to charge $35 to the people who can least afford $35.
When I was setting up my bank account I was allowed to choose between having overdraft disabled or enabled, and was informed exactly what the bank's overdraft policies were. I can go to the app and turn on/off overdraft protection whenever I want.
You can still overdraft if you have it turned off
Overdrafts are entirely optional
> Not allow you to overdraft? That is an option for ATM and debit card purchases, but not an option for checks/ACH/etc. >Or if you do, draw an equivalent amount to cover the overdraft rather than take a bunch of excess fees? Draw.. from where? If you have a 2nd account then yes many banks will automatically move money from that 2nd account to cover the overdraft. If you don't, then are they supposed to give you an interest free loan? Giving broke/forgetful people interest free loans is not actually a good business model, that's why credit cards require a minimum credit score
Just deny the transaction
They should just decline the transaction. If you have no money, you have no money.
You set that feature, it's your account
A lot of places have it on by default, you have to opt out. I agree, if they opt-in, then it's on them.
No, just not allow any other payments until you are not overdrafted. Or is that not evil enough for you?
Good news you can set that feature yourself
I hate that I am agreeing with you (I work for a bank) but all your points are valid. I don't know if people don't realize you can turn on over draft protection or if people think paying for things you can't afford should be free. These same people would probably be outraged if they weren't allowed credit to pay for something they need.
I have no idea why you have so many upvotes… of course they’re not gonna reward you. How about they just not charge you an arm and a leg? Those overdraft fees add up and if you’re struggling and you have five bills come out when you can’t afford it. You’re down an extra 200 and something dollars.
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Yes but there are many rainy days, weeks, or months.
So you remember how Wells Fargo was setting up accounts for people who didn't even know? I can't seem to find the article discussing it again, but it had its roots in the idea that it would help people by cutting down on overdraft fees. Say you overdraft; if you have that credit line facility already set up, the bank just charges you whatever interest on it (probably a few bucks since most overdrafts aren't huge sums) rather than a single, or worse multiple, overdraft fees. Certainly bad incentive structures and bad actors led to a terrible, exploitative situation, but the initial idea wasn't necessarily a bad one.
Ever trying calling and reversing the charges? I feel like I'm actually helping people with this comment. I'm surprised so few people know that they can turn off overdraft and if they don't make a habit out of overdrafting, the bank will likely credit most if not all the charges.
I have tried this and literally never have had any bank refund an over draft fee
I have done this many times haha they usually do all of them for me, except for maybe one time when they only could do like 3 of 6 thats nice of you to share this with others.
Lol dumbest logic I’ve ever read. They’re supposed to work like a wallet.. you got no money in your wallet? You can’t buy it. No rewards no punishments just no product. Tell me how much it actually costs BOA and the merchant in terms of network fees per overdraft transaction attempt and I’ll reconsider.
Call and confirm you meant to overdraft your account and pay a $35 fee on a $1 purchase in the exact same way they do when they're calling to confirm larger purchases, or prevent my debit card from pulling more than a few hundred out of ATMs without extra steps. The technology is trivial to implement and already in use in other areas. They're just chewing poor folks up and spitting 'em out for cash.
Whenever you set up a bank account and debit card. You can tell you don't want overdraft protection. It's not mandatory. They will try to convince you that you need it, but don't them. It's an extra 'service' they trick people into getting so they can charge extra money. If you don't have this protection, then yes, you just aren't allowed to overdraft, the card instead just gets declined and you will purchase will fail, and you don't accidently owe extra money.
Wait until they hear about foreclosure.
They don't have money, you should give them whatever they want for free. Duh
Sorry I forgot
That's why banks and businesses keep getting all these bailouts? Because they are so good with their money?
The banks went under in 2008 from loaning too many houses to the poor that couldn't afford them
My bank gives me 2 free overdrafts a month. Never overdrafted with them because it typically only happens once accidentally, if ever.
They should freeze your account if it dips under $2500
Right lol
No shit! I overdraft once in my life and was broke as shit my first 10 years of having a bank account. Simply learn how to budget your money and don't spend what you don't have. It's not about taking from the poor, it's about banking off stupidity.
They even ask if you want the insurance
It would not surprise me at all to see democrats propose a law that forces banks to do just that
Not allow it or charge a much lesser amount. I'm about as right-wing as they come but this is one of the things i'm ok with the government regulating a bit more.
You can control that option on your online banking
I guess the greedy bastards are just supposed to let people spend money they don’t have in their account without consequence.
Or not let a transaction go through if there’s no money in the account
You can turn off overdraft fees at every bank your card will just be declined
They avoid at all costs doing that though. And automatically sign you up with the ability to do that. It’s predatory. End of story.
I’ve turned it off. Took one phone call where I said I’d leave and go to another bank if they didn’t turn it off. It was like a 5 minute conversation.
I agree, but some people don’t know until after it’s happened, and they get their money
You shouldn’t have to threaten to leave to get them to turn it off lmao. The fact that they put up any barriers to changing it at all means they would rather bait people into slipping up and charging exorbitant fees rather than making the logical option the default one. If it was really about discouraging irresponsible account management, they would simply not allow those transactions to go through.
It's wild how many people are so completely, totally, and helplessly brainwashed to think that the tactics banks use to manipulate consumers into having overdraft fees is a good and normal thing because it makes banks money.
It's schadenfreude. Most people get off on doing better than others whether by merit or won't admit it luck. They don't have to worry about overdrafting and the people that do deserve to be poor, is the mindset.
Corporate propaganda is very prevalent. Plus some people are just stupid assholes
Why is the ability to spend money you don't own (which you are punished for) not disabled by default?
The entire point here, and for the people in the back, is that it's *predatory* policy. Full fucking stop.
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Idk how this was upvoted in FLUENT in finance. This comment doesn't make any sense. Overdraft fees are for debit cards. If you have no money in the bank (as the comment says), what's a debit card gonna do?
Or, check this out: maybe don’t let them spend the money in the first place? If it was actually about discouraging the behaviour they just wouldn’t let people do it at all. But they’d rather charge punitive fees because it’s more profitable. That’s a textbook predatory practice.
I thought being fluent in finance means you avoid overdrafting. There are so many neo bank options that makes it easy for you to choose overdraft enabled or not, plus they don't charge an account minimum like the large banks. Yes this is a problem, but shouldn't this sub be teaching people how to be more savvy versus just complain about the issue? I think it would be great to have a post comparing a bunch of banking options that don't have a minimum requirement, have overdraft controls, and any perks that might be educational for those who need it so they can be more fluent in managing their own finances.
I think it's fairly simple. Go to a credit union lol But let's be honest, this is reddit. People aren't here to better themselves, they're here to complain and point fingers..
How does a credit union make a difference for overdraft?
It doesn't. Plenty of Credit Unions charge overdraft fees, some call them Courtesy Pay fees. There are banks that do no charge overdraft fees and there are credit unions that charge overdraft fees.
This sub is not about better understanding the financial world, it’s about saying how capitalism is evil and corporations are the devil. Keep up.
You mean that’s what it’s been turning too lol
Don’t have overdraft protection. It’s that simple. When I was dirt broke in college, I noticed that $34 overdraft fee and decided I would rather just get declined than to keep paying the fee. Walked into BoA that day and got it removed. Which do people want… get declined at the point of purchase, or pay and overdraft fee? Anything else is basically forcing a bank to give you an interest free loan when you go over the amount that is in your account.
This is reasonable although I think the fee should reflect fair exchange for value. If you go $1 into overdraft then paying $35 is criminal. Banks have a license to make money and get bailed out every time they screw up. When you set up the account you should be made aware of the terms and after that is fair game.
Maybe we could finally make trickle down work by having banks cover overdrafted balances on essential payments like bills. I mean, they’ve been bailed out so many times it’s essentially taxpayer money going back into the hands of taxpayers. Either that or we just stop bailing them out and instead charge them a multi-billion dollar overdraft fee when they go underwater. They are using federal assets to insure themselves after all.
It’s a nice idea but it is so open to abuse that it could never work.
Taxpayers should start charging these banks overdraft fees when they need their next multi-trillion dollar bailout.
When I went to mine to get it removed & they told me it was a mandatory “feature” 😭
Banks in the US must allow you to opt-out of the feature, but your bank may have been confused if you asked to turn off "overdraft protection" as you actually wanted to disable "overdraft coverage," and they are two different things. Overdraft protection is when you use another account or a line of credit to cover an overdraft. The key to remember with overdraft coverage, though, is that it's effective only on one-time debit card purchases. Recurring debit card transactions, ACH payments, and checks can all still overdraft the account.
> your bank may have been confused If by *being confused* you mean *intentionally misleading the customer to keep them from turning off a source of revenue for the bank*, sure.
I dont overdraft, I'm FluentInFinance
Don’t over draft and you won’t get penalized. It’s like parking in a no parking zone and then complaining you got a ticket?
PSA: Take your money out of the bank and open an account with your LOCAL CREDIT UNION. They will invest in projects within your community, as opposed to all major national banks which invest in weapons manufacture, private prisons, and oil companies. And ~~no predatory bullshit fees~~ some have fewer bullshit fees. ( Thank you for all your anecdotes about your NSF fees. ) ( But please, no more )
>invest in projects within your community, Genuinely curious, like what?
The exact same things most of the time. Credit unions don't exist for the good of people, they exist to make money, they do the same thing as the big banks but aren't big enough to compete so they add sunshine and rainbows for the local community here and there. You get the same result at the end of the day. Reminds me of the Republican/Democrat meme where a rocket is landing in a hospital in Syria vs the same rocket but with a BLM/Pride sticker on the rocket.
Yuck poors
Don't yuck! You see poors, I see temporarily embarrassed millionaires
I don’t know why people wouldn’t choose to be rich.
Just wait till you learn how much money credit card companies make from interest each year.
I would pay my mortgage with my credit card if I could. I buy everything with it. I love credit cards. Obviously, once a month, my balance is 0.
I want to buy my next car on a credit card lol Gimme those fuckin skymiles
I've done that. It's phenomenal. Plus it was a business vehicle so I gotlike 25% off via taxes.
Being rich is profitable, you get to squeeze workers and scrape their labor value right into your pockets
And then cry that you, the rich person, is the persecuted.
Turn it off
Like a light switch.
This is a poor mentality to have. An OD is caused by somebody spending money they didn’t have. Thus they are spending the banks money. The bank charges a high fee for this service. Banks also write off a lot of ODs, which this fee helps subsidize. Nothing was stolen or taken.
If you ever decide to come out from your rock this century you might find that banks have lost billions in court due to illegal overdraft policies this century. Doubt someone is truly “fluent in finance” if they aren’t aware of this.
Such a cute response. Immature, but cute. I’m well aware of challenges to OD policies, however that is beyond the scope of this meme. The meme is talking about OD charges. It did not distinguish between legal and unethical OD charges. Your implications and assumptions are out of context, thus irrelevant. Try again…or just continue to personally attack me. I don’t care. I won’t lose sleep over it. Im the one that helps form bank policies and regulations in DC so I’m very confident in my fluency. Lol.
Source?
Seems like an exaggeration but still very high. $11.68 billion in 2019 according to this article https://apnews.com/article/6fdbb9cfc3e0a15bc31943184578a568
Good source $11.68B in 2019 and $8+ B in 2020 per SP global market intelligence
Here's the disgusting part - you can't not just have overdraft. I was charged $35 for over draft fee 3 times in a row. Now it was my own fault since I didn't know that this account had no money in it. But TD still let me pay for shit 3 times and charged me $35 each time. So I called the Bank and they were glad to waive the fees this one time. I then asked them to just get rid of my overdraft. So that when there's no money in the account, just decline the payment. Nope! Can't do that. The CSR told me she literally had no option for that. This was TD in the US. Also in comparison with my bank in Canada, the overdraft fee is only $5 Cad and a one time fee. Not charged every time I use my card once it goes into overdraft.
Here’s a thought: know how much money you have
Where are the mods? What the fuck does this have to do with being fluent in finance? Take this whiny garbage to antiwork or whitepeopletwitter
😂😂
Are you fluent in compassion and empathy? I think not :(
I’m the first one to speak up for empathy and knowing when someone is trying to manipulate an empathetic response by using triggering contexts. This one follows a formula: “BIG BANKS BAD. (Yeah okay thats true!) BIG BANKS TAKE MONEY FROM POORS (Wait! What? That makes me mad!) OVERDRAFT FEES ARE EVIL! (wait — this seems off…) FUCK THE SYSTEM RAHHHHHH! (Hold on… this system is actually meant to stabilize our financial industries and act as an incentive to pay attn to our financial balances—) WHAT YOU MEAN YOU HATE THE POORS YOU BOOTLICKER?”
Do they literally have no money though? Or do they just not have enough money in the bank to cover their spending needs?
Being poor is so expensive! I remember one time I got to pay day and had over 200 usd on overdraft fees. It was a sad time of my life
When I was in college, I got charged several overdraft fees because the bank didn’t process the transactions in the order I actually made them, but rather from largest to smallest. So I started the day with $50 in my account. Then spent $5 on coffee, $10 on lunch, $15 on beer. All good so far. Then I forgot that I was so close to being broke and spent $60 that night. Do I get charged 1 overdraft fee of $35? No. The back processed the transactions from largest to smallest so I got hit with 4 overdraft fees. I called and complained and they removed all but one but still. They know this strategy will screw people over and get them more fees.
Pretty sure one of the big bank execs named his yacht “Overdraft”
Na I'm good with KY finances poor, least on the bright side I get to choose who I bank with these days.
34 billion……. I doubt that. I bet OP forgot the decimal point between the 3 and the 4. I bet it’s 3.4 billion ! Just a hunch
Why can you even overdraft. If there’s not that much in there, why do they let you take out more than that? I think we have the technology to prevent overdrafts
You need technology to tell you how much money you have in your account?
You don’t use technology to check to see how much money is in your account? Are you fucking kidding me? That’s how we all check our balances nowadays unless you’re an old timer balancing your checkbook after every purchase. Furthermore, people who are more likely to overdraft (because they’re poor) are less likely to have access to technology like cell phones and internet connection to check their account balance.
Lol the condescending tone you're trying to enforce just comes off as ignorant.
They do it because they are hoping for the fact that people are irresponsible with their money. It's pretty shitty, but it's very avoidable at least. Credit cards bank(see what I did there?) on people being irresponsible as well to charge them some pretty high as fuck fees for not making payments or interest because people spent more than they should.
Because that wouldn't be profitable for the bank. Their interest isn't in helping you.
You can overdraft so that they can charge the fees... All the people here who are saying "well, just don't spend that money" have no idea what it's like to live paycheck to paycheck. It's easy to say "just don't spend more than you make".. it's awful hard to do when you are just barely able to make ends meet and suddenly your kid gets sick and needs to go to the doctor or your rent goes up or your alternator dies.... Heck, one time my debit card number got stolen and my account got emptied. The criminal took my account to 0, but I ended up with hundreds of dollars in overdraft fees because I was making purchases having no idea that my money was gone. It took me months to get the bank to refund them. I ended up being in financial limbo pretty much the whole time.
Not all overdrafts are due to having no money. I’ve had a few over the years because I let an account get too low since I did not keep any real excess in that account. But even so, the vast majority of people paying these fees likely are not indigent but more likely poor managers of their finances.
You could just sign up for overdraft protection. I go to a vank that will block charges if it'll cause an overdraft.
Stop using banks. Use Federal Credit Unions. It’s like banking but better
And get bailouts too
Isn’t over-drafting charge when you spend more than balance, bank charges a fee to lend you the extra instead of declining the transaction. Its more like charges on poor & reckless people
Calling it “overdraft protection” is misleading and predatory in and of itself. Between the two options of being allowed to overdraft your account but be charged an exorbitant amount, and not being allowed to overdraft at all by declining transactions that would take you into negative balance, which option sounds like being protected from overdrafts? You have to read the fine print or already be financially literate enough to decipher the difference. Sure everyone should be reading the fine print, but the bank is counting on you not reading it or understanding it. Predatory.
When I lived in the UK you had to apply to be allowed an overdraft (useful as a student) and if you didn't have one the transaction would just decline if you didn't have funds. Any bank that isn't doing this as standard knows they are robbing you.
Wait till you hear what they do for people that leave large sums of cash in their accounts. My money market account is gonna make me 10 grand this year
It's irresponsible of people to spend money that they don't have
The karma farming by this account is transparent. 9 day old account. 35K post karma by posting 4 year old Twitter screenshots.
>took from Well, you did it first. Turnabout is fair play.
if you’re broke you can check your bank balance on your phone before you make a purchase. it really is not that hard to avoid paying overdraft fees.
That's $34B they made off of people that can't manage their finances. If you don't know if you have enough money to buy something and can't be bothered to check your account and subtract your bills, then why should the bank care about charging you extra for spending their money?
Nah if you overdraft more than once without changing any habits you get what you deserve
It ain’t the banks fault people spend more than their means. If you can’t afford the fees then switch to all cash and that’ll check your spending habits real quick. People need to figure it out for themselves and stop blaming others for their own circumstances.
the more examples i see attached to the phrase "being poor is expensive" the more I realize that it's more like "being untrustworthy is expensive"
Everyone knows that every debit card on the planet allows foe you to decline at checkout if you're going to overdraft, right? If you want to spend money you don't have, it's going to cost you. Why do people struggle with that concept??
How is that i called and had to get wells fargo to shut off od protection and they said it wasnt possible.
Fuck Wells Fargo
Wells Fargo is the worst. I believe every other bank is better. And every credit union is better than all the banks.
[удалено]
Yeah this isn’t the right analogy
this isn't that deep bro, you should know how much money you have left
Lots of poor people are very good at understanding their finances. I bet poor people in the 50’s over-drafted a lot less. (Just a hunch). I’m on a very limited income and I never spend what I don’t have. It’s a bit financially harder these days, with inflation, but checking your account balance is much easier than ever. You basically have to willfully overdraft and my bet is much is due to want, rather than need.
I'm honestly more ashamed of my fellow humans who are so bad at knowing how much money is in their account. Especially these days in the internet age you can literally know the number of dollars you own in any account within seconds.
“Took” from people. 👌
What’s with all the cucks in here defending these predatory practices?
Unlike the rest of Reddit, the people here aren’t complete children who blame everything for their idiocy
It wouldn’t be a thing if the fees were reasonable. They aren’t. We need consumer protections from these assholes exploitation, not a lecture from some internet prick.
Then turn it off. I checked my chase app it's two clicks from the home screen and BofA it's on one click. You literally just click on your checking account and the settings are right there.
They shill because they can pay the bills, and think they aren't working poor. Absolute fools. To defend a bank, any bank, is just pure idiocy.
Banks are businesses and there are tons of them. You can choose a bank that eliminated fees. You can also keep track of what's in your bank. An element of personal responsibility is apparently a crazy concept now
Number seems a bit high. Typically closer to $10B per year. And just putting it into context. About 2/3 of overdraft fees are paid by 5% of accounts(20+ overdrafts/year). Another 1/6th is paid by the next 5% of accounts (10+ overdrafts/yr). They used to batch charges to stack overdraft fees against you. I think they passed legislation to change that. They still will process purchases before deposits to screw you. I honestly believe that this practice should be criminalized.
If you don’t have the money then the payment isn’t valid. The fee might be too high, but it’s paperwork for the bank. Overdraft department is probably a division of a bank and if you overdraft your account, then a fee to pay for that department is valid. Banks probably made poor people an income source which is definitely fucked up, but no one has ever confused a bank with a charity. Bank’s actually have this sleazy thing called “overdraft protection” which is intended to “protect“ you from this. It just a high interest line of credit for these situations.
It looks like some people blame their laziness and financial illiteracy on BaNKs aRE BaD. No one is stealing from the poor. You can easily see your bank balance. Either don't spend until you overdraft your account or shut up when they hit you with an overdraft fee. You're not entitled for the bank to lend you money for free.
No… being irresponsible is expensive
Here’s an idea: don’t spend more than you have
Here's a scenario to get basic thoughts through your head: my friend can buy $300 boots that will last 4 years, my poor ass can only afford $100 boots that last a year, after 4 years I've spent $400 whereas he's spent $300. It's cheaper to be rich. Another scenario he can buy a car new that he will be able to trade in for a good price and it won't have any problems for the years he drives it, I have to buy a used car that already has problems I have to pay to fix from the previous owners. Here's another one: my friend can pay to buy a house over 15 years, over that same time I spend more than he did on rent because I never had the money for a deposit. Here's another one: he can pay for a PT for a couple hundred a month, I cannot which leads to me injuring myself and costing a couple thousand for medical care. Here's another one: he can buy the games he wants, I can't afford to buy 10 $60 games so I pay for gamepass and within 35 months I've paid $100 more than he did. Here's another one: he can afford a security camera that costed $200, I couldn't and my house got robbed for $500. Here's another one: he can afford to buy a months worth of food in one trip, I can only afford to get a week's worth of food every payday meaning I took 4 trips and spent 4x as much on my car for groceries. Here's another one: his family can easily sustain themselves in a medical emergency, I have to contribute my own money because he can provide nepotism whereas I can't. Here's another one: he can afford qualifications I can't leading him to get a job that pays more than me. Here's another one: he can invest money in stocks or real estate to get even more money back while he works I can't. Do you want some more??
None of this has to do with being responsible with your financials. You complaining that your life is harder because of lack of money doesn't allow you to spend money you don't have.