shorterexcerpts: squashed: Overdraft Fees Due to new banking regulations, you may be asked to opt in to extra overdraft services. Previously, the banks quietly enabled them and allowed customers who thought their debit cards or ATM withdrawals would be denied if there weren’t funds to cover them to run up massive fees. If you’re presented with a choice like this, choose “no.” It will probably be surrounded by language about the great freedom it will allow.  You do not want the “freedom” of picking up a massive overdraft fee if you screw up your math on account balances. This question similar to “Would you like to be poked in the face with this burning stick?” In virtually every case, the answer is no. Or, rather, the answer is, “No. And please stop asking me if I want to be poked in the face with a burning stick.” (I should note that opting out of point of sale overdrafts is not financial advice. Also, don’t read my thoughts on being poked in the face with a burning stick as medical advice.) Here’s the fine print from the overdraft agreement: * We will charge you a fee of up to $39.00 each time we pay an overdraft. * Also, if your account is overdrawn for 5 or more consecutive business days, we will charge an additional $28.50 once every five business days thereafter until your account becomes positive. * There is no limit on the total fees we can charge you for overdrawing your account. Ah. So the bank might loan you a few dollars to cover you a few days until your next deposit. If you annualized those fees for a $20 overdraft, you get an interest rate of something like 3,000%. You don’t want it. You’d be better off borrowing money from that friend of a friend whose lending practice involves a garage and a baseball bat. He might break a few knee-caps, but at least he’s honest about what he does. If you’re in a position where you’re likely to overdraw your bank account, you probably can’t afford a $40 fee. Worse yet, the bank may reorder deposits and withdrawals to make sure you get hit with multiple overdraft fees, even if you never overdrew your account. And the big problem isn’t really one or two overdraft fees here or there. The big problem is the way the fee structure is set up to prey on those who aren’t financially savvy. It’s set up to prey on those who can least afford it. People whose only income is social security may pay thousands of dollars a year for “services” that give them no benefit whatsoever. It’s absolutely unconscionable.

shorterexcerpts:

squashed:

Overdraft Fees

Due to new banking regulations, you may be asked to opt in to extra overdraft services. Previously, the banks quietly enabled them and allowed customers who thought their debit cards or ATM withdrawals would be denied if there weren’t funds to cover them to run up massive fees.

If you’re presented with a choice like this, choose “no.” It will probably be surrounded by language about the great freedom it will allow.  You do not want the “freedom” of picking up a massive overdraft fee if you screw up your math on account balances. This question similar to “Would you like to be poked in the face with this burning stick?” In virtually every case, the answer is no. Or, rather, the answer is, “No. And please stop asking me if I want to be poked in the face with a burning stick.” (I should note that opting out of point of sale overdrafts is not financial advice. Also, don’t read my thoughts on being poked in the face with a burning stick as medical advice.)

Here’s the fine print from the overdraft agreement:

* We will charge you a fee of up to $39.00 each time we pay an overdraft.

* Also, if your account is overdrawn for 5 or more consecutive business days, we will charge an additional $28.50 once every five business days thereafter until your account becomes positive.

* There is no limit on the total fees we can charge you for overdrawing your account.

Ah. So the bank might loan you a few dollars to cover you a few days until your next deposit. If you annualized those fees for a $20 overdraft, you get an interest rate of something like 3,000%. You don’t want it. You’d be better off borrowing money from that friend of a friend whose lending practice involves a garage and a baseball bat. He might break a few knee-caps, but at least he’s honest about what he does.

If you’re in a position where you’re likely to overdraw your bank account, you probably can’t afford a $40 fee. Worse yet, the bank may reorder deposits and withdrawals to make sure you get hit with multiple overdraft fees, even if you never overdrew your account.

And the big problem isn’t really one or two overdraft fees here or there. The big problem is the way the fee structure is set up to prey on those who aren’t financially savvy. It’s set up to prey on those who can least afford it. People whose only income is social security may pay thousands of dollars a year for “services” that give them no benefit whatsoever. It’s absolutely unconscionable.