The overdraft fees are killin' me
I am so upset right now.
I've had ten overdraft charges in the past two months.
They're 35 dollars each.
Do the math. That's almost rent.
I was literally crying on the phone when the customer service rep explained to me how their system works and why I got these fees when I actually had over a hundred dollas in my account.
Bank of America is fucking retarded how their system works, but at the same time it's my own fault.
New life lesson learned....
Always keep a checkbook/register and write down purchases, because online banking doesn't mean SHIT.
Racking up overdraft fees
Since research shows that consumers who use debit cards more often are also more likely to overdraw their checking accounts, card-issuing banks can reap an additional $1 million from nonsufficient-fund fees, according to the Mercator report. Another study revealed that customers who used debit cards more than 20 times a year paid an average of $223 in NSF fees annually, compared with $40 for those who didn't use debit cards at all.
Until 2003, banks routinely declined debit-card purchases and ATM transactions for amounts that exceeded a customer's balance unless he or she had decided to link the account to a line of credit, credit card, or savings account to cover overdrafts. But since then, the number of banks using overdraft software packages has increased 80 percent. The software allows banks to pay overdrafts without alerting customers that they are exceeding their balance, according to the Center for Responsible Lending, a consumer advocacy group. Customers don't realize that they'll be charged a fee, which average more than $30, if they proceed with the transaction. This fee is essentially a finance charge for a short-term overdraft loan, which the bank swiftly recoups from the account holder's next deposit. When translated into an annual percentage rate, overdraft fees on debit cards can exceed 1,000 percent.
"You may use a debit card to avoid paying high interest on credit-card balances, but when you're hit with what amounts to high-cost overdraft loans, your debit card can quickly become the most expensive credit card on the market," says Eric Halperin, director of the Washington, D.C., office of the Center for Responsible Lending. The group estimates that consumers pay $17.5 billion in overdraft loan fees annually--nearly half of which are triggered by debit-card transactions or ATM withdrawals.
Consumers not only overdraw their accounts when they fail to keep track of all of the lattes or newspapers they've bought with debit cards, but a practice called "blocking" can also increase the odds that overdrafts will occur. Some hotels, gas stations, and other retailers put a hold on funds in your checking account until a debit transaction is processed--which can take from one to several days for signature-based payments. What's more, the amount that's blocked can significantly exceed the actual amount of your purchase.
"When you swipe your debit card for $25 worth of gasoline, $100 of your account balance may be temporarily blocked because the system doesn't know if you're filling up a Miata or an Explorer until the transaction has settled," says Greg McBride, a senior financial analyst at Bankrate.com. "If you're running a low account balance, blocking can lead to multiple overdrafts, which is why debit cards may be fine for buying a cup of coffee but not so good to use for rental cars or hotel bills, where blocking can tie up hundreds of dollars."
To avoid being hit with costly bounce-protection fees, McBride recommends that you record all debit transactions in your check register and regularly monitor your account balance online. He also advises that you sign up for overdraft protection linked to a savings account.
I've had ten overdraft charges in the past two months.
They're 35 dollars each.
Do the math. That's almost rent.
I was literally crying on the phone when the customer service rep explained to me how their system works and why I got these fees when I actually had over a hundred dollas in my account.
Bank of America is fucking retarded how their system works, but at the same time it's my own fault.
New life lesson learned....
Always keep a checkbook/register and write down purchases, because online banking doesn't mean SHIT.
Racking up overdraft fees
Since research shows that consumers who use debit cards more often are also more likely to overdraw their checking accounts, card-issuing banks can reap an additional $1 million from nonsufficient-fund fees, according to the Mercator report. Another study revealed that customers who used debit cards more than 20 times a year paid an average of $223 in NSF fees annually, compared with $40 for those who didn't use debit cards at all.
Until 2003, banks routinely declined debit-card purchases and ATM transactions for amounts that exceeded a customer's balance unless he or she had decided to link the account to a line of credit, credit card, or savings account to cover overdrafts. But since then, the number of banks using overdraft software packages has increased 80 percent. The software allows banks to pay overdrafts without alerting customers that they are exceeding their balance, according to the Center for Responsible Lending, a consumer advocacy group. Customers don't realize that they'll be charged a fee, which average more than $30, if they proceed with the transaction. This fee is essentially a finance charge for a short-term overdraft loan, which the bank swiftly recoups from the account holder's next deposit. When translated into an annual percentage rate, overdraft fees on debit cards can exceed 1,000 percent.
"You may use a debit card to avoid paying high interest on credit-card balances, but when you're hit with what amounts to high-cost overdraft loans, your debit card can quickly become the most expensive credit card on the market," says Eric Halperin, director of the Washington, D.C., office of the Center for Responsible Lending. The group estimates that consumers pay $17.5 billion in overdraft loan fees annually--nearly half of which are triggered by debit-card transactions or ATM withdrawals.
Consumers not only overdraw their accounts when they fail to keep track of all of the lattes or newspapers they've bought with debit cards, but a practice called "blocking" can also increase the odds that overdrafts will occur. Some hotels, gas stations, and other retailers put a hold on funds in your checking account until a debit transaction is processed--which can take from one to several days for signature-based payments. What's more, the amount that's blocked can significantly exceed the actual amount of your purchase.
"When you swipe your debit card for $25 worth of gasoline, $100 of your account balance may be temporarily blocked because the system doesn't know if you're filling up a Miata or an Explorer until the transaction has settled," says Greg McBride, a senior financial analyst at Bankrate.com. "If you're running a low account balance, blocking can lead to multiple overdrafts, which is why debit cards may be fine for buying a cup of coffee but not so good to use for rental cars or hotel bills, where blocking can tie up hundreds of dollars."
To avoid being hit with costly bounce-protection fees, McBride recommends that you record all debit transactions in your check register and regularly monitor your account balance online. He also advises that you sign up for overdraft protection linked to a savings account.