Banking Debaucle

Finance & Legal Banks & Banking
1

Hey you all: I just got into an argument w/ the supervisor at the WAMU bank in which i place my minuscule fortune in daycare checks. When I opened the account w/ them they told me I have (and i quote) "$200 in overdraft protection."

What, exactly, would you expect that to mean?

To me, and maybe this is the olden days of 8 yrs ago, OD Protection meant a credit line upon which you pay a certain interest rate for the money that you go over accrued monthly. I was stupid, though, and didn't ask what WAMU's idea of OD Protection is. Their definition is:

SO you do not become embarrassed at the checkout line, even if you go 1 cent over balance, they will do you the favor of covering you, but then charge you a $32 NSF fee.

My question to the supervisor of the poor customer service folks was, IF THE MONEY IS NOT IN THE ACCOUNT, HOW CAN IT BE HONORED?? If I go over balance by buying soething at freakin STARBUCKS, i'd rather be embarrassed that the money isn't there than have to pay $32 more for a freakin coffee.

Twice.

My questions to you are these:

1) What is your idea of OD Protection? Am I wrong for thinking that it was the tradtional OD Protection? I do understand it's my own fault for not personally looking into the agreement terms on the online bank site, but when they tell you you've got OD Protection up to $200, but don't explain the VERY IMPORTANT caveat that if you DO happen to go 5 cents over, you will be charged for every instance an amount of $32... Don't you think that's information the customers could use?

and

2) Does anyone have a bank they'd recommend? It's just for small change stuff, not to place my whomping fortune in.

Just saying, if I thought it was the traditional OD Protection, I'd never have spent the money, so it's not a matter of bank fees for me, but a matter of principal that the terms they use for what amounts, essentially, to highway robbery to quell the feeling of embarrassment (oh boohoo if you overdraw, you deserve the embarrassment! har) is a pretty stupid way to do business.

I'm also waiting to get my period, so some of this can possibly be due to the feelings of total bloat and irritability. Still...

appreciate any bank recommendations, is anyone out there totally happy w/ their bank, or even moderately? I've found the last 3 banks I've been to are just not as good as my good old Bank One....

2

Big banks typically cater to big companies...I'd go with a credit union which is more for the family. I guess the users "own" the credit union so it's much more family friendly. Fees are not big like at banks. I've always been really happy with both credit unions we used. Also, the interest rates you make and the loan rates are usually better than at a bank. Brokerage banks like Schwab or Scottrade or Fidelity if you have investment accounts there are good as well.

3

Just to let you know, I think this is crazy too. However, in the past few years I have come to understand (not through my own mistakes but from my BF's sister)...that if you have an account in good standing at really almost any bank (and have had your account there for a while)...most of them will allow you to go up to $1000 in the hole! Yes, $1000! Crazy you say? Yes. And, they will charge you a fee every single time you go more in the hole! Go figure.

4

Nancy,
Before I took maternity leave and then became a stay at home mom, I worked as a licensed banker for Bank One, now, Chase. I think your thinking of Overdraft Protection is right. The bank manager should at least reverse the fee since you didn't fully understand their stupid policy. I've never heard of a bank offering overdraft protection when you sign up for an account and then saying that it's not actually, "overdraft protection" but that they'll cover your debits up to $200. I think most banks charge around $32 for overdrafts. This earns most banks millions or billions per year. I think WAMU and TCF bank caters to customers who typically get declined at bigger banks for having too many overdrafts or writeoffs. This means that they have customer who they can earn big bucks on by charging them overdraft fees. At Bank One, overdraft protection in the olden days was a line of credit that you signed for and then were charged interest on the princeple. The modern overdraft protection at Bank One (again, now Chase) is either by connecting a Chase Credit card to the checking to cover the negative amount, or by connecting a Savings account. The problem I saw with people relying on these two things too much was either they charged up a bunch before they realized it and then couldn't afford the monthly payments or they depleted their savings faster than they realized. In my opinion, they only way to avoid fees and/or high interest rates is to very strictly pay attention to every penny you spend. I personally don't write in my check register, as I don't use checks hardly ever. I use my debit card or cash, and use online bill pay. I look at my bank account and pending payments every single day. I used to go over and now, I keep really good track and never go over. One thing is to be very careful when using a debit card at a really small boutique...when they use that old fashioned credit card machine with carbon copy paper, sometimes it takes several days to hit your account - so write those down. Also, at the gas stations, most of them will only post $1 to your account and the actual amount doesnt hit for up to a week. Very annoying, but this also has to be kept track of. So, get a password and look at your acount..every single day and keep track of those couple things I mentioned and you should be in good shape. Good Luck!!!

5

ingdirect.com - best bank yet - plus has interest on accounts.
chase I like too.

worst ones for the same exact reason you list above:
Wamu and Fifth/Third Bank.

We just switched to Wamu at work for our work checking and had 2 checks bounce because they would not deposit the funds in right away, it was ridiculous.

6

Thanks all for the good advice and etc. What makes this issue worse is that I’d checked the “notify me of any overdraft charges” online but it wasn’t “activated”, so if I didn’t check online today, I’d not have found out for a few more snail-mail days. I just opened an account last week w/ my Fidelity money manager that i was simply going to use to transfer money in for purposes of buying more stocks/mutual funds, but now I’m just going to use them as my regular bank (no fees to deposit if you use an ATM w/ Plus or Visa/MC logos! cheep!), no annual fee, and there’s interest to boot! My husb has ING, and I will also look into opening my other account w/ them, if I should need a second. Just so furious that they wouldn’t take any responsibility for their own miscommuncation on the matter, while as soon as I took responsibility for my end, they rode that horse all the way to town, telling me it was my responsibility all along! I say, w/ the caveat to the overdraft protection being the bounced check fees, it’s not really PROTECTION, is it?? Oy. Thanks again mamas. xoxo