How To Fight “Overdraft” Bank Fees!

Banks charge more fines and fees than the National Football League!

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By now, Christmas presents have been unwrapped, the holiday ham is almost gone, and there maybe a few candy canes dangling from the tree. The holiday season is slowly dwindling away and before you know it, Christmas bills will start rolling in. As those holiday bills slowly began to creep into your life, be very vigilante of your bank account transactions.

Banks love this time of year. In fact, most banks in the United States make huge profits during the months of October, November, December and January. Overdraft fees tend to peak during the holiday season. Sometimes people go over budget and mistakes happen. However, even the most meticulous penny pincher, can get hit with unexpected overdraft fees. I have created 3 tips to help fight bank overdraft fees.

  1. Challenge The Order in Which Your Transactions Are Posted

Banks have a tendency to post checking account transactions based on dollar amount. Hmmm? “whacha talk’in bout, willis?” I am simply stating banks are notoriously known for posting large dollar amount purchases last. In theory, banks should post checking account transactions in a chronological and sequential order. Our daily lives consist of a series of events that take place in a linear sequence through time. Why can’t my checking account transactions post in the same way?

As transactions are cleared through checking accounts, the items purchased should post in the order that they were purchased. Sadly, American banks no longer adhere to ethically business standards. We have tragically entered the era of predatory business practices. Banks strategically use these practices in hopes of accumulating overdraft fees from checking account holders. Although this practice is  perfectly legal, it’s are highly unprincipled.

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By posting transactions based on dollar amount, banks are anticipating an account holders negligence to monitor account activity. For example: if you were shopping on-line and decided to purchase a $250 rocking chair, $100 pair of jeans and $75 hair dryer, your transactions would probably post to your checking account in the following order: $75 hair dryer, $100 pair of jeans and $250 rocking chair. Here is the problem, if you purchased the $250 rocking chair at 11 am, that transaction will post after the less expensive transactions post. Therefore, several hours could pass by before your account balance is accurately updated. Unless you personally track all of your purchases through out the day, you will be operating under false pretenses regarding your account balance. If you happen to forget you made a purchase at a 11am, you are more likely to overspend and acquire an overdraft fee.

To avoid the banks “transaction posting” trick, it’s best to keep your own spending log. Most checking account holders are issued check book packages. Inside each package you should find several books of checks and a check book register. Check book registers are great to use on the go.

You can quickly write down the dollar amounts  you spend as purchases are made throughout the day. Some banks even offer mini versions of check book registers that feature a paper sleeve holder for your debit card. On your next bank visit, be sure to ask a teller for a debit card register booklet.

2) Ask About Your Banks “Clearing House” Procedure

CheckClearing is a procedure which involves is the process of moving a check from the bank in which it was deposited to the bank on which it was drawn, and the movement of the money in the opposite direction(Wikipedia 2016). Most banks have an automated check clearing process built in place. Be sure to contact your bank and inquire about its clearing housing protocol. By having a better understanding of your banks clearing house procedure, account holders will be able to better anticipate when funds are scheduled to post to their account.

Bank of American has an automated clearing house process for checks up to a certain amount. Bank of America’s clearing house is actually backed by Merrill Lynch. Therefore, when I receive deposits to my checking account, the check should post to my account immediately. The key word is “should.” In the event a fraudulent check attempts to clear my account, Bank of American would not acquire any losses because they are protected by Merrill Lynch. Although Bank of America’s clearing house is backed by a solid financial firm, I have experienced delays when receiving deposits which have subsequently resulted in overdraft fees. http://www.bofaml.com/en-us/content/ach.html

For example, as a Lyft driver, I receive my earnings through my checking account. Lyft automatically releases my earnings to my checking account when I submit a request through the iPhone app. Here is the kicker, Bank of America has a “practice” in place that allows them to hold funds from immediately posting. When I asked a Bank of America customer service representative about this practice, I was told some vendors have the authority to choose when funds are applied to your account. I was also told, by the same representative, that the bank has to make sure the check clears. Hmmm? Does something smell fishy to you?

3) Don’t Be Afraid to Escalate the Situation

If you are speaking with a representative from the bank regarding over-draft fees, don’t be afraid to ask for a supervisor. Entry level employees usually “man the phones ” in any corporate organization. Although entry level employees are essentially vital to their organizations, they normally don’t have the jurisdiction to refund overdraft fees. However, they have no problem telling you “no” in terms of refund collection. Bye Felicia!

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Entry level employees are set into place for a reason. They are primarily used for phone call scanning. The urgency of your call usually determines how quickly you are referred to a member of upper-level management. Therefore, when I contact the bank I always stress the dire need of my refund. I convinced the representative to look-up the automated clearing house policy. I ask them to post large transactions as soon as possible. If I am told “no” at any point in the conversation, I ask to speak with a manager.  Sometimes I feel an entry level employee’s sole purpose is to simply say “no” to account holders. When most “normal” people are told “no” they usually quit. However, unlike a “normal” person, I am very anal and I hate being told “no.” Therefore, I always escalate the situation and I request to speak to a manager.  In fact, whenever I requested a overdraft refund, a specialist or a supervisor authorized the refund transaction.

© 2017 MsMillennialMom All Rights Reserved

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