Ally eliminating overdraft fees

[Walt34]

How about folks not go negative? That is a great way to avoid overdraft fees.

Whaaat! Are you seriously suggesting that people accept personal responsibility for their own actions? How 1950's!

As a convenience years ago the credit union where we do most of our banking offered overdraft protection by simply taking the overage out of the savings account but they had to eventually stop doing so because of all the abuses. Now they charge what the banks charge. We've never had the issue.

I watched about a minute of the video and then gave up on that. How egregious - a business made money because people can't be bothered to do grade school arithmetic and are often irresponsible! What evil will they think of next?

 

[jollystomper]

Dw and I put a simple solution in place, but one that requires discipline. We just put $1,000 as the "base" for our checking account and do not consider it there. We do not include it when tracking transactions from Quicken, we treat that money as if it is another account. We started doing this 30+ years ago. At the time, while I wrote the regular bill checks DW wrote a lot of other checks and her math is not the best. Also there were times when we would write checks but forget to enter them into the ledger right away. Doing this help us avoid minor overdraft situations (almost always <$100).

These days we still do that, even though almost all of our checking account transactions are bills and we can plan what is needed in advance. If we write more than 2-3 checks a month these days that is a lot. But it is a tough habit to break .

 

[CoolRich59]

We have Ally and bounced a check last week.

I was beside myself, particularly because we have our checking account set up to pull money from savings in case of such a circumstance. So, when I got the notification I was not a happy camper at all.

In fact, it bugged me so much I could not sleep. So, I got up and started going through our accounts to try and figure out what happened. It did not take long. It turned out the DW needed more checks and grabbed a new book of checks -- but they weren't for the checking account, but from an Ally money market account we'd closed about 5 years ago.

(Don't ask me why she kept them, or why she kept the checkbooks for the HELOC account we closed 3 years ago. )

 

[ERD50]

I realize that on-line banking and being able to look at balances on-line, or getting them via email/text could be contributing to the problem.

In the "old days", if you were reasonably disciplined, when you wrote a check, you entered into the register and subtracted that from your balance. So now you knew if you had funds to cover the next check you wrote. You are looking at a sort of "phantom/future" balance, what you would have when all the checks cleared.

Today, you see your balance on-line, but you don't see that you have an outstanding check (the system doesn't know about it until it clears), or more likely, you have an automatic payment set. That payment may hit tomorrow, but it's automatic, you aren't thinking about it. So you see a decent balance and think you are OK, but tomorrow, that auto-payment creates a NSF overdraft.

That's the kind of thing a reasonably responsible person still might miss if they got distracted by other things in their life, or just had an "oops".

Seems to me there should be some software out there that alerts you to future draws, and shows when your balance would go negative if you don't add funds. And on the rare occasions that people write checks, you should be able to enter it online, so it is accounted for until it clears (the check #'s/amounts match - so one just replaces the other, no double-counting).

-ERD50

 

[Sunset]

Dw and I put a simple solution in place, but one that requires discipline. We just put $1,000 as the "base" for our checking account and do not consider it there. ....

Very long ago I started doing the same thing, and whenever it dipped below $1,000 I actually felt nervous and scrimped more to get it back up above "my zero"

 

[njhowie]

I watched about a minute of the video and then gave up on that. How egregious - a business made money because people can't be bothered to do grade school arithmetic and are often irresponsible! What evil will they think of next?

Let me say once again, that most folks who are getting worked up about others "not taking personal responsibility" are missing the point, and it may be because they chose not to watch (most of) the video and understand the point Ms. Warren was making - which she emphasizes at about the 2:00 mark.

I'm sorry that many folks saw this as their green light to get worked up and on their pedestal to preach about capitalism and personal financial responsibility. The points you're making are obvious, and nobody denies them.

I'm sorry that I started this thread and it continues going off the rails.

I'm now ignoring my own thread, as it's not worth following.

 

[ERD50]

Let me say once again, that most folks who are getting worked up about others "not taking personal responsibility" are missing the point, and it may be because they chose not to watch (most of) the video and understand the point Ms. Warren was making - which she emphasizes at about the 2:00 mark.

I'm sorry that many folks saw this as their green light to get worked up and on their pedestal to preach about capitalism and personal financial responsibility. The points you're making are obvious, and nobody denies them.

I'm sorry that I started this thread and it continues going off the rails.

I'm now ignoring my own thread, as it's not worth following.

So I went back and paid special attention to her remarks @ 2:00.

My take on that is just more obnoxious grandstanding by a politician (with no solutions offered).

She complains that the banks got breaks, and they didn't pass them onto their customers. Well, Ms Warren (as a member of Congress) gave the banks those breaks (whatever breaks she's talking about, I'm not certain) - if she didn't also attach some strings to that, then that's her problem. But no, she blames the banks (and gets cheers from her anti-business supporters).

You may not like their NSF fees, but AFAIK, they are pretty transparent, and you have choices of where to bank.

So, thanks for posting and showing what a hypocrite Ms Warren (and most of Congress, not to just single her out) is.

Now (and to show I'm not just all pro-business), I can think of an area of overdraft fees that could be worth some regulation, or at least better transparency. Seems I've heard that a bank might actually take a days transaction, and in an overnight batch process, order them with the largest debit hitting first. So that could end up with some remaining small debits (not large enough to cause an NSF) to each be charged an overdraft fee, instead of listing the largest last, and creating only one fee.

I did read a justification of this, a banker saying yes, they do reorder transactions, largest first, since the larger debits are probably more important, like a mortgage payment. So in some cases, if only the sum would create the NSF, that would allow a larger one to go through. Not sure I buy that, but it does show there are two sides to most stories. Do they put in credits first? I dunno.

That could be dirty pool, IMO. Has Ms.Warren proposed any legislation on this?

OTOH, if an individual is over-drafting so often as to create a lot of fees, there's another problem that just needs to be fixed, so they don't have overdrafts and don't have any fees.

-ERD50

 

[Aerides]

That's the kind of thing a reasonably responsible person still might miss if they got distracted by other things in their life, or just had an "oops".

Seems to me there should be some software out there that alerts you to future draws, and shows when your balance would go negative if you don't add funds. And on the rare occasions that people write checks, you should be able to enter it online, so it is accounted for until it clears (the check #'s/amounts match - so one just replaces the other, no double-counting).

-ERD50

Good point. No one under 40 today has used a paper/manual check register. In my 20's I knew full good and well exactly what my real balance was and when I was in danger.

Today? I could not tell you what is about to hit my bank, or my actual balance amount within say $300, as everything is setup for auto-payments. What if one of those is a higher balance than I thought? Since I don't peruse everything online every day, it would be possible, if I didn't have a surplus of cash in my checking account. And that surplus would never have been possible for me in my younger days.

So, yeah, whether check or scheduled automatic payments, it would be nice if banks provided some sort of register so people can keep track of things without resorting to 3rd party software or spreadsheets or whatever (I mean there probably are apps out there but I don't bother).

 

[athena53]

Now (and to show I'm not just all pro-business), I can think of an area of overdraft fees that could be worth some regulation, or at least better transparency. Seems I've heard that a bank might actually take a days transaction, and in an overnight batch process, order them with the largest debit hitting first. So that could end up with some remaining small debits (not large enough to cause an NSF) to each be charged an overdraft fee, instead of listing the largest last, and creating only one fee.

I did read a justification of this, a banker saying yes, they do reorder transactions, largest first, since the larger debits are probably more important, like a mortgage payment. So in some cases, if only the sum would create the NSF, that would allow a larger one to go through. Not sure I buy that, but it does show there are two sides to most stories. Do they put in credits first? I dunno.

That could be dirty pool, IMO. Has Ms.Warren proposed any legislation on this?

I was going to mention this. The banks' rationalization for it (that the larger checks may be more mission-critical) makes sense but they still rake in a bundle for all the smaller ones they bounce. Someone mentioned earlier in the thread that they process withdrawals before deposits- I hope that's not true. That WOULD be dirty pool.

I agree on personal responsibility as well as keeping the fees closer to the banks' actual costs for NSF and other customer errors. One reason I've never had a joint checking account in either of my marriages was that I didn't want one person writing a check or making a bill payment based on the current balance in the account and the other, not knowing about the check or bill payment, making an ATM withdrawal.

 

[ERD50]

... One reason I've never had a joint checking account in either of my marriages was that I didn't want one person writing a check or making a bill payment based on the current balance in the account and the other, not knowing about the check or bill payment, making an ATM withdrawal.

Yes, back in the days when we were both writing a lot of checks (it's a rarity now), we had separate accounts. Our other married friends seem to think that was weird. But for the exact reason you say - who wants to deal with constantly having to know what the other person is doing. Why make things complicated? And before cell phones were common, where you might call and say - "Hey, I'm writing a big check, don't write anything more than $100 until we can make a deposit". Just seemed like an opportunity for a mix up, even though both of us were responsible about verifying our balance.

-ERD50

 

[mickeyd]

I have never paid an overdraft fee in over 65 years of banking (Age 76).

 

[MichealKnight]

Well don't discriminate

If someone can spend more money than they have in their account, and not be penalized for it. Then why can't I keep a month's credit card bill or mortgage in my favorite dividend stock or fund - and then get around to paying my bill when I want?

I think this would be a great feature

 

[MichealKnight]

I have never paid an overdraft fee in over 65 years of banking (Age 76).

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