I have noticed a disturbing trend with my checking account lately, something that I literally haven't experienced for years: overdraft fees. About ten years ago, these unnecessary fees were a regular part of my existence, because I didn't really keep track of how much money I was depositing, and how much I was spending.

Fast forward ten years: I am almost obsessive-compulsive about checking my bank balance, and I know how much is being spent in my household, down to the penny. So, what gives? Why on Earth is an OCD frugal guy like me getting hit with bank overdraft fees, to the tune of about $200 over the last couple of months? The answer lies within my bank itself.

The banks in my area have not been immune from the hard economic times afflicting the rest of the country. Housing starts are down about 30 percent around here, so there aren't nearly as many home loans being processed by the bank. People are buying fewer new cars, as evidenced by the desperate tone of the TV commercials being aired by the local car dealers. The bank has to get its money someplace, and they have turned to bank overdraft fees.

My paycheck is on direct deposit which means I only receive a check stub every payday. The money goes directly into my checking account. What I have noticed lately is this: the bank may receive checks (debits) roughly around the same time as my deposits. In some cases, they are showing up on the exact same day, but at other times the debits are actually coming in to the bank AFTER my deposit, but they are being subtracted BEFORE my deposit is credited. Just a year or two ago, this was NEVER the case. If deposits and debits appeared on my account on the same day, the deposit was always credited first, and then the debits were deducted from that amount.

The result of this change in banking practice is bank overdraft fees. When I wrote the checks or used my debit card, the money was in the account, but the bank is hoarding these debits until the checking account balance is low enough that when they process them, it will result in an overdraft fee...about $28 per transaction. Those fees add up quickly.

I challenged the teller at my local bank branch about these fees. "What are you people doing?" I asked, "Holding on to my deposits and running my debits until you get $28 out of me?" The teller just gave me a knowing nod and said he would eliminate the overdrafts from my account, saying he was "sorry" and that "many other people have complained about the same thing."

So, my bank is intentionally trying to overdraft my checking account. I have been a customer of this particular bank for about six years, but as soon as I locate a suitable alternative (most likely my local credit union, where I already have a savings account), I'll be giving my bank the boot. It's a sad commentary on the bank, really. They are going to lose a loyal customer (I got my car loan through them, and always pay on time) over $28 overdraft fees.

My question for them (and other banks participating in this despicable practice) is this: is it really worth it?

2 comments

  1. Anonymous // September 24, 2009 at 3:54 AM  

    you challedged the teller? are you for real, teller's don't make the rules you must complain to company and your state

  2. Anonymous // October 8, 2010 at 1:26 PM  

    Actually, if you ask the teller about the NSF charge and you are polite and aren't a repeat offender, we will often get them refunded for you. Now if you are snobby about it and we can see that just in the past month you have overdrafted 4 times, we are not going to be so sympathetic to your cause. Also, is your bank USBank? I did not work for them, but often had new customers tell me about similar experiences with them. Oh and $28 for an overdraft? That is one of the higher fees I have heard. My credit union charges $10 and my bank charges $17 and some change. You might want to look at a different bank just because of the outrageous fees!!

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