No More CFPB, No More $5 maximum overdraft fees, as 47 gets ready to repeal them.

[probinson]

Even if the bank isn't engaging in that specific form of manipulation, there can still be a notable lack of clarity regarding when a transaction will actually impact your account. Bills and paychecks can land on different days of the week or in different parts of the month.

Yes. That's why, until I was confident that I had sufficient funds, I never set up automatic payments, so I could ensure that I had money available in my account when I made the payments. That's my responsibly as the account holder.

Merchants and payment processors can run batches at different times. Reimbursements can be processed late. etc. If we're talking about transactions with holds, that lack of clarity can extend to the size of the transactions as well.

It would be interesting to see just how much of the overdraft revenue results from these practices vs. people just not paying attention to their balances.

 

[iluvatar5150]

I'm not sure how you overdraw a credit card. If you attempt to use your card to purchase something and you don't have sufficient credit available, the transaction gets declined.

That's not necessarily true. It depends on the terms of the card. I recently had a situation where a large charge landed on the day before my payment was scheduled to hit (or perhaps it was earlier that day; I forget), which exceeded by credit limit. The bank sent me a note saying that I'd gone over, but that they'd approved it anyways.

I don't know why debit cards don't behave how you describe. (or maybe some do? I don't use my debit card)

 

[probinson]

That's not necessarily true. It depends on the terms of the card. I recently had a situation where a large charge landed on the day before my payment was scheduled to hit (or perhaps it was earlier that day; I forget), which exceeded by credit limit. The bank sent me a note saying that I'd gone over, but that they'd approved it anyways.

I don't know why debit cards don't behave how you describe. (or maybe some do? I don't use my debit card)

You're correct that it's the terms of the card that matter. None of my cards will allow me to overdraft my accounts, as they behave as I described in my last post. If I don't have sufficient funds/credit in the account, then the transaction is denied. The only way I could overdraft my bank account is by writing a bad check, which is extremely unlikely to happen as I only print 1-2 checks each year.