If you haven’t noticed, banks (especially brick and mortar ones) are always looking for ways to squeeze a few more dollars out of their customers. They are consistently losing market share to online banks and are struggling to keep up.
My old bank (I now use ING and a credit union) used to put a balance of $1100 on my receipts when I had only $100 in my account. I asked the teller about it and she informed me that it was a new “service” they offered called a “courtesy overdraft loan.” So, if I wrote a $150 check and only actually had $100 in my account, they would clear the check rather than bouncing it. Which is nice, I guess. But what they did not mention is that they would charge me $30 each time I tapped into that credit.
I was disappointed with the bank because they advertised this money as your “available balance,” I inquired about it to find out the truth, but I am sure many people didn’t and fell victim to this sneaky policy.
Do yourself a favor and check to see if your bank is running a similar program. If they are, you can sign up for overdraft protection which will pull funds from your savings account rather than triggering a huge overdraft fee.
Not all banking institutions have this policy, most credit unions are not that money hungry and ING Direct has a much better overdraft policy as well.
Technorati Tags: overdraft, bank fees, online banking
Related posts:
- 3 new credit card fees you should know about
- Where should you open an online bank account?
- Should I pull my money out of the bank?
- The safest bank in America – ING Direct
- Virtual Bank account
- ING Direct vs. Virtual Bank
- How I organize my bank accounts
- Find the highest rates on savings accounts with Bankfox
{ 2 comments… read them below or add one }
Banks can be terrible! The funny thing is, our local credit union is the worst! We used to have an account there, but then they decided to charge $10 a month just for the privilege of walking through their doors and seeing someone in person. We dropped them like a hot potato and signed up with ING for our savings.
We moved our checking account to a regular bank and have done just fine there. But you always have to read the fine print.
@Lynnae
Wow, you are right – I would have been out the door as well!!
I have never heard of a bank or credit union with that policy, but I wouldn’t be surprised if we start seeing more of that in an effort to compete with the online banks. Time will tell…