Friday, July 30, 2010

Overdraft (not so pretty) opinion.

As a bank employee I've heard a LOT about the opt-in/opt-out regulation change that is happening at banks and credit unions across the county. Now I don't claim to know it all and when I find an article online about the whole thing I like to read it.

So I was reading this article on MSNBC today and agreed with a lot of what the writer put. I do think some of the ads and notices are confusing but this is a confusing regulation. I also agree that people are paying CRAZY amounts of money (overdraft fees) for a small purchase (that $1.50 Coke might end up costing you $31.50 if you don't have the money).

All in all, the article (I thought) was a good article that had good points and made the issues a little more clearer than mud. The part that really got me was one of the comments.  Jei from Ohio posts,

"... Having linked savings accounts is probably the safest (less expensive) way to protect your debit account, but you have to have money in savings for it to be effective --- that means being responsible and actually saving a bit of money every so often. There is no easy or direct solution to this debacle...unless you're wealth or just simply have the funds to cover all your purchases. Hopefully, this mess will convince more people to be a lot more aware of their daily account balances and be more active in balancing their account based on the expenses they know they have."
Really? No easy solution? You don't have to be wealthy to avoid this issue. SIMPLY HAVE THE FUNDS TO COVER ALL YOUR PURCHASES. It's THAT easy. Seriously. If you don't have the money in your account, why spend it? And what if you don't know what is in your account? KEEP TRACK. I see so many people who spend hundreds of dollars each month in fees and then complain that they don't have any money. If they would just quit spending what they don't have - they would have that much more! I don't understand how that is so hard to see.

Maybe it's harder than I think to keep money in an account. But I've done it for YEARS and never had an issue. I do have my savings account linked to my checking (in case of an addition or subtraction error or an error on the part of the bank or a business) but that's for emergencies. I don't depend on that to keep me afloat - which is seems is what a lot of people seem to do with overdraft protection.  And I did this all before I learned everything I know now from Dave Ramsey.

So what's my suggestion? Don't spend more than you've got. And if you do (accidentally or intentionally) - use a savings tied to your checking (and keep money in the savings!) to keep yourself from being hit with huge fees from the bank.

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