Posted on 03/10/2010 9:28:41 AM PST by cajuncow
NEW YORK – Bank of America customers will soon be unable to spend more than they have in the accounts linked to their debit cards. It's a step that may become a common move ahead of new regulations limiting overdraft fees.
Rules set by the Federal Reserve that will ban banks from charging such fees, without first getting permission from the customer, are set to take effect July 1.
But Bank of America is going a step further than the regulations require. It will simply no longer allow debit card purchases to go through if there isn't enough money in the account.
(Excerpt) Read more at news.yahoo.com ...
I’m torn... while I like this idea generally... I really think that if other banks do it, it will mean the end of my free checking accounts.
What a great common sense notion.
—gee whiz—imagine—not being able to spend more than you have in your account—!
Man alive, the days of personal responsibility are long dead.
Sad how so many people cannot balance a checkbook.
What about Outstanding Balances?
Will you still blame the customer when a pending charge has not gone through and the Obamacare center hits your bank account first?
I admit having to use overdraft protection in my early years. Then I grew up and didn’t spend more than I had. It’s time for America to grow up.
According to the article 93% of overdrafts are charged to 14% of customers. I wonder if it will change the behavior of the 14% or the other 86%?
Can you say, "Up Sh!t Creek..."? Some how, I've managed to spend only when I have it in the bank. I know, I'm some kind of Right Wing crank...
I agree with you. However, if you take a look at the state of public education, it is amazing that there are that many people who can balance their checkbook.
You betcha!
It doesn't matter which order transactions are processed if you don't spend more than what you have.
Of course, I never use my debit card for any purchases at all because I am afraid of holds and other riff-raff being taken directly out of my "real money" account. I prefer paying for everything with a credit card, and then paying that once a month.
Why would they allow you to overdraft anyway??? I understand if you have a savings or money market account and they could draw from there - but why would anyone expect to be able to draw beyond the amount they have in the account?
Wonderful idea - banks have a nasty habit of posting checks drawn on accounts prior to posting any deposits which also appear in the same banking day. This results in their being able to charge NSF - not sure why this doesn’t also stop.
The older we get, I think the more we better manage our assets. You learned fairly quickly. I know folks who should know better that have not learned.
Having said that, I am not happy with the banking regulations being placed on the industry. Ultimately it is going to hurt not only the industry, but also the American consumer.
The average bank charges at least $35 or more per overdraft. If you overdraft a bunch of small transactions, it can add up to a buttload of fees paid to the bank.
Easy way for banks to earn more fee revenue. Each overdraft comes with a nice little $29-35 penalty fee tacked on to your overdrawn account.
I think we can attribute many of the fees to those individuals who did and do all that overdrafing and defaulting. The bank has to get its money back somehow and since they can’t or won’t get it from those who won’t pay, they go after the rest of us who are responsible enough to pay our debts. That is incredibly unfair.
I've operated that way for thirty or forty years. Don't have a debit card.
Of course, Dave Ramsey thoroughly condemns this style of operation, but it's a great deal for those who have the necessary strict fiscal discipline.
The Obamster will see to it that they are eliminated through some new, insane and cockamamie “consumer relief program.”
Act your wage!
Dave Ramsey Fan Ping List.
If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.
I have a retired friend who does not keep track of how muche he has or has spent..ever. Therefore, within 2 weeks of getting his pension and SS check - he’s broke. He doesn’t have a computer so he either “calls” the bank or uses his debit card to find out what his balance is at that particular moment and withdrawals cash based on that balance even though he “knows” there are checks out that have not cleared. He keeps trying to “beat the bank”, lol. Last month alone he had $495 in bounced check fees and over $500 in the hole by the middle of the month. Pretty dumb but he doesn’t seem to care.
Lol. I copied and pasted that very sentence. Did you see the comments? Sad really. “Can I get my fees back, I have a negative balance?”
I was always given a simple interest (prime float) on my overdraft.
if it exceeded that I could not get approval and if it snuck thru I got a call on my sweep and a literal phone call.
35 dollar OD charges per purchase are crazy
Add me please, love Dave!
Doesn’t this happen already? Our bank accidentally credited a deposit we made to a different account and a couple of days later, the store rejected our debit card. Good thing, because then we checked out our banking info on-line and discovered their mistake right away.
I see what you both mean - I guess my mind was thinking how back before debit cards, we wrote checks. Obviously there was no way to instantly check to be sure it would pay. But since they can instantly know if there is money in the account, it appears this is more of a money maker for the bank with the fees and I was looking at this from a more decent and logic standpoint, thinking no one should be using their debit card if there is no money...Instead, the bank doesn’t care because they make money off the deal. Unreal
Aye. There's the rub when the subject is about banking practices. You have to think of bankers like you do lawyers, politicians, and used cars salesmen... ;-)
Same here. I use my AX card everywhere. When I my statement, I log onto my BofA account and schedule a payment to American Express on the exact due date (after first making sure sufficient funds will be in the account on that day).
When my bank first sent me a new debit card with a Visa logo on it, I called them and asked if a PIN would be needed to do a credit card charge. They said, no. So, I said, well close the account, then. I don't want it. I received a straight debit card in the next day's mail.
When you use a credit card, and there's a problem, the card company has to get the money out of you. But with a debit card, the bank already has the money, and you have to get them return it. With credit cards available, there is simply no reason to use a debit card in other than ATM context.
RE: “—gee whiz—imagine—not being able to spend more than you have in your account—!”
*****************
Yes, what a concept, eh? Spending only what you actually have? Imagine that!
Since age 17 when I got my first checking account (eons ago), I have always known (within a few dollars) how much I have in my primary checking account. How do people not know how much they have in such an account????
The article specifically states that only some 14% of debit card holders routinely go over their balance. I’d love to know some more detail about these characters, who probably should never have been issued debit cards to begin with.
RE: “I prefer paying for everything with a credit card, and then paying that once a month.”
and...
“I’ve operated that way for thirty or forty years. Don’t have a debit card.
Of course, Dave Ramsey thoroughly condemns this style of operation, but it’s a great deal for those who have the necessary strict fiscal discipline.”
***************
I have NO sympathy for those who are habitually overdrawn. None!
And I’m with you — have a couple of debit cards banks forced on me but have never once used them. I pay no fees of any kind, ever, use credit card(s) for everything and pay up at end of month. Banks used to call me a ‘deadbeat’ as they got no fees from me; these days they are kissing my a**.
—yep—the only two overdrafts I have had in fifty-one years were bank mistakes—(they were also the only two bank mistakes relating to my account in that time)—
Wouldn’t it be neat if our gubmint worked this way?
Gee, ya think? How about forcing them to post transactions from smallest to largest, to minimize overdrafts, instead of largest to smallest like they do now, to generate the most bounces. Or at least force them to be agnostic and process them in the order received. I love how they intentionally process them in the order most likely to create problems.
Well, I don’t know if the 14% will do anything different, but the 86% aren’t doing anything they can change.
These type of banking changes will simply encourage those that cannot seem to balance a checkbook or track what they have or spend to go to check cashing entities that charge way more, on a percentage basis versus any bank.
Actually, the entire pending law is social engineering by the feds. Once again, getting into peoples lives in a big way and beating up banks - some of the OD activity is a courtesy to customers - that will now be history.
I know mine's a little lighter than a Snickers bar, but I've never actually weighed it.
WHAT? You mean all these years I could’ve spent MORE than was in my checking acount?
News to me, LOL!
I hate BOA. I’m considering moving my mortgage with them, but in reality, I’ll have it PAID OFF before I could ever tear it away from them, so I’m still way ahead of the game. :)
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