I saw this article in the NY Times for Sept. 8. Read the full article here. In summary, it describes a push from banks to let customers overspend when using debit cards, and then charge overdraft fees for each transaction over the balance. The article describes a poor guy who had a deposit that hadn’t cleared yet and rang up $238 in overdraft fees on charges for less than $50 for one day of activity. The bank did not notify him of the overdraft until after the fees had been incurred, and they would not remove them. The simple solution is, don’t spend money that isn’t in your bank account. However, with the use of plastic now common place, and the difference in processing time for a deposit versus a debit card transaction, it is easy to see how a lot of people could find themselves in a similar situation.   This post isn’t to vilify banks either. The down turn has affected everyone. They are in business to make money. It is up to you, the customer, to be aware of how banks operate and to make sure that you avoid falling into a position that allows banks to charge you additional fees.

 

 

UPDATED:   I saw this article in the Wall Street Journal today.  It seems this post managed to whip lawmakers and the public into a frenzy.  Or maybe it was the original NYT article.  I will let you be the judge.