I was reading the Business section of the Atlanta Journal-Constitution today and one of the main stories was on how banks are making about $17.5 billion in overdraft fees. The main reason, based on the article, debit cards. Banks used to decline debit card transactions if there wasn't enough money in the account. Banks are now allowing those charges to go through and then charge overdraft fees. The average overdraft fee is $27.40 according to the article. The Center for Responsible Lending, a nonpartisan consumer group that focuses on what it terms abusive financial practices feels that due to the lack of revenue from debit cards, banks are allowing customers to overdraft their account. Abusive practices, allowing customers to overdraft ?????
It seems to me that if you use your card or write a check when you know you don't have the money, I think you should be responsible for the consequences that occur. I think it all comes down to RESPONSIBILITY. I think so many people want to "pass the buck" these days. I can understand the occasional mistake in thinking you have $100.00 when you only have $10. I know this happens, we are all human.
I am not perfect and have bounced checks myself. Luckily, it's been over 10 yrs since I bounced a check. It happened when I opened my first checking account at my hometown bank when I was 18. I failed to balance my account and bounced a check to the local deli for $4.55. My bank charged me $10 and the deli let me come pick up the check and pay cash without any additional charges. (This was a real small town and I was VERY embarrassed). They still allowed me to write checks and there was never another bounced check.
I know some people view this issue differently but I just want to write my opinion on overdraft fees.
Tips to avoid overdraft fees:
- Link your checking account to a savings account or credit card (if they are with the same bank) Some banks charge if they have to transfer money from your overdraft acct.
- Open an overdraft line of credit
- BALANCE YOUR ACCOUNTS! Online banking makes this so easy!
- Don't try to "float" checks. The Check 21 law which changed how banks process checks, allows checks to clear must faster. This hurts those people hoping to make a deposit before a check clears.