Today I was talking with a coworker who was lamenting his recent run of overdraft fees. I happen to know that most banks routinely sort the days checks high to low to ensure that they’ll get the maximum chance of an overdraft, and thus the maximum amount of fees.
I told him that, but also said he could probably get the “extras” from today reversed if he just went and spoke nicely to a branch manager. He then boggled my mind. He told me that this was just one incident in dozens this year.
Dozens?
Firstly, I have a hard time understanding why the guy even still has a checking account if he is that sloppy. But, that wouldn’t be helpful to say. What I asked instead was if he’d ever thought of getting a small amount of overdraft protection.
“Well yeah, that’s what all these charges are for” he told me.
“No, those are fees for you overdrawing. If you got overdraft protection, you’d just take an expensive but instant loan and not have to pay the fees.
I don’t know if the guy will do it. I told him to just go to a branch and apply. I made less money than him when I first applied for overdraft protection, and I think they like to give it out.
My point is simply this, and I hope if helps someone. You should have the money for the checks you write. If you don’t, and you know you are too sloppy to keep careful track of it, then get overdraft protection and make sure to pay it off immediately, every time. If you don’t know about it, then do your research online. It isn’t a great solution, but it is better than the formula (dozens * $29) = $too much wasted.
Technorati Tags: overdraft protection, checking, banks
2 Responses
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Some banks do charge a fee every time you use your overdraft protection. This fee might be $10, as opposed to a normal overdraft fee of $39. The bank is going to get you either way if you are too lazy or whatever to keep track of your balance.
Doug, I agree, but the way I’ve seen it usually work is that a “chunk” of money gets auto-loaned to you, often the nearest $100 more than you need.
So, if you are overdrawing three checks:
$40
$15
$10
Your fee would be $10, you’d have taken a loan for $100, and you’d have $35 left to cover any other overdraws.
The best solution is obviously to stop being lazy (or in my case, fearful) with your money.