Anybody fully understand overdraft policies ?

[Rambler]

DS overdrafted his debit card about a month ago (put too much in the savings acct a couple weeks earlier and wasn't paying enough attention to his balance). No charge from the bank, no fee for overdraft protection. His acct is a Student Account at Wachovia, and is tied to my acct so I can fund some of his educational expenses thru there.

PARENTAL ADVICE WARNING - I chewed him out for it, because my name is on the account as well (so I can easily handle above noted funds transfers), and his overdrafts could affect MY credit rating. Told him if he did that again, I was taking myself off the acct, and that he would be responsible for self funding ALL of his educational expenses. END PARENTAL ADVICE

FWIW,

R

 

[LOL!]

So account was overdrawn, did bank use the savings account as a "no-fee overdraft protection" or did bank use another one of your accounts as a "no-fee overdraft protection" or did son have to manually move money from savings to checking to cover the overdraft himself?

In the world of credit, bank balances and credit are separated. I don't think an overdraft on your checking has anything at all to do with your credit score. In the same way, a million dollar checking account balance will not affect your credit score at all.

 

[Rambler]

His savings account is in a different bank. His overdraft came over a weekend and his pay transferred in on the monday after the overdraft occurred. Non of my accounts were affected. In reality, his SS# is on his account, so it should not really affect my credit score. However, I have read that overdrafts on your checking accts DO in fact affect your score (even though this one "probably" would not have "really" affected my credit score, if I ever needed it, and my credit was thoroughly scrutinized, this theoretically "could" affect it as my name is on the acct). The point is that I wanted him to understand that it carelessness in using your debit card has farther reaching consequences than he knew (at the time of the event).

R

 

[ERD50]

Actually I was thinking the correct tool in the example stated would be CASH.

Gotcha, and agreed. I was thinking back to the post about the kid stranded at the train station, and pictured a college student with higher cash flow needs (pizza, beer, even books probably cost a lot more than they did 30 years ago!).


-ERD50

 

[LOL!]

OK, now look at what you've gone and done:
Bank of America Ending Overdrafts on Debit Cards - NYTimes.com

 

[Delawaredave5]

OK, look what you gone and done now:
Bank of America Ending Overdrafts on Debit Cards - NYTimes.com

LOL - thanks for posting. So I might not be nuts after all.........

I love the quote below - wonder what the bank paid in market research studies to get that conclusion........

“What our customers kept telling me is just don’t let me spend money that I don’t have,” said Susan Faulkner, the bank’s deposit and card product executive, who said the overdraft changes were part of a broader push to build trust among its customers. “We wanted to help them avoid those unexpected overdraft fees.”

 

[clifp]

LOL - thanks for posting. So I might not be nuts after all.........

I love the quote below - wonder what the bank paid in market research studies to get that conclusion........

“What our customers kept telling me is just don’t let me spend money that I don’t have,” said Susan Faulkner, the bank’s deposit and card product executive, who said the overdraft changes were part of a broader push to build trust among its customers. “We wanted to help them avoid those unexpected overdraft fees.”

Ack that does it. I am selling my few remaining BofA shares. How will banks ever make a profit if they don't [-]gouge [/-] get reasonable fees from [-]suckers[/-] customers for [-]stuff buried in fine print[/-] valuable services?

It is a sad day for American banking when BofA of all institutions, stops trying to screw their customers. Fortunately, I feel confident that this isn't a real change in attitude but only the threat of new legislation. Hopefully, BofA will find new and clever ways to generate fees.

 

[traineeinvestor]

Ack that does it. I am selling my few remaining BofA shares. How will banks ever make a profit if they don't [-]gouge [/-] get reasonable fees from [-]suckers[/-] customers for [-]stuff buried in fine print[/-] valuable services?

It is a sad day for American banking when BofA of all institutions, stops trying to screw their customers. Fortunately, I feel confident that this isn't a real change in attitude but only the threat of new legislation. Hopefully, BofA will find new and clever ways to generate fees.

Without a word of a lie, I hope the banks do keep charging fees - lots and lots of fees.

As an investor in equities (either directly or through collective investments such as mutual funds, etfs, pension plans etc), it is in my interest for the banks to be profitable. I want my investments to do well enough to support my early retirement. Lower bank profits means a lower return on my investment with a knock on effect for my retirement plans.

The alternative to either lowering fees or reducing profits is to widen the spread between borrowing costs (deposits) and lending rates - either depositors get less or borrowers pay more (or both) - neither of which is a good result for most of us.

Needless to say, I have never paid an OD fee and have zero cost OD protection.

(That said, I agree that banks should offer the options of having the transaction refused for insufficient funds or give a warning when the account will go into OD.)

Apologies for threadjacking the threadjack.

 

[clifp]

Well since my post was mostly tongue cheek, I'll make an alternative suggestion as to how banks could make money to satisfy shareholders.

For a start they could make loans only to people with a proven history of paying them bank. For people with lower credit score demanding higher levels of collateral and higher interest rate would go a long way to maintaining profitability Actually, two of the bank stocks I own (BB&T, and Wells Fargo) mostly did this.

In the specific case of Bank of America, Mr Lewis the CEO, would be smart to not overpay for acquisitions like he did with CountryWide and Merrill Lynch. When at all possible avoid using BofA stock as currency, to start with I hope he reads Warren Buffett's letter this year on the subject of acquisitions.

Finally, when he does take over a company clamping down on excessive compensation and absurd office remodeling expense, would help offset the loss fees from overdraft "protection".

 

[Katsmeow]

BOA will do an ATM only card. Debit cards have been a huge problem for my son (yes, yes, yes we told him to record his expenditures, not to spend money that he didn't have, etc. But did he listen? No). The only thing that has finally worked is for him to not have a debit card at all and to have only an ATM card.