LooseSuits

Charges with the two banks I've been with are $30 and $35 so that's not shocking to me at least.

Banks are trying to make money too. They're not a nonprofit organization so they make money any way they can.

Good point peroty, but in UK terms $30 is roughly £15. The $30 seems more justifiable to me. An overdraft is effectly a loan, so you should expect to be charged some interest.

Compared to the UK's £45 per charge it's a considerable difference. Of course you have to take into account that the UK living expenses are probably more so the bank charges would be higher, a £45 charge for taking out £5 accidentally over your limit does seem a little extreme.

Some people do go into large amounts on their overdraft and suffer the consequences, but for small amounts it hardly seems fair when most banks don't offer an overdraft as an option and you don't have the choice of being declined if you accidentally spend a little to much before pay day or have a direct debt come in a day early...

Banks are businesses as well, so I guess they too want to make money. I do think the charges are a little ridiculous in the UK though, especially when you consider the service that most UK banks give is poor in comparison to other European countries.

Well then, your bank clearly hates you. Find a different bank. ;-)
Or stop overdrafting your account. hehe

I don't know if you have anything similar to credit unions over there but that's certainly something to look into. :)

I have no problem with overdraft fees, even large ones, as long as it's made clear before the event.

What I find evil, is the common American banking practice of selectively ordering your pending charges to maximize the amount of overdrafts. This is done by nearly every bank in the US.

Say you made 3 purchases saturday for $100, $200, and $3000 in that order. Say you've got $2500 in the bank.

The bank will process the $3000 charge first, overdrafting you, and then process the $100 and $200 charges, incurring 2 more overdraft fees. That is evil, dishonest, and unethical... and practiced by every banking chain I've ever worked with.

Ah, I've had that problem too.
They do is as a "convenience" to you.
If you ask the bank they should be able to turn that off.
I had Wachovia do that here in the states when I was in college since I would get slammed periodically for nickel and dime charges.

@ peroty

lol Good advice! Actually it's not something that happened to me, but I hear about constantly as someone in the finance advice industry and the charges are making news here.

There's also a big uprise in the UK now as you are able to claim these charges back as they aren't legal charges - but if you claim them back your bank will shut all your accounts.

The ramifications of this if you hold multiple accounts with the bank you have your everyday bank account with is quite big for most people.

As someone who has opened and shut accounts in other countries where I have lived before here (Australia and USA) I can tell you from experience that applying for a bank account in the UK is no picnic!

@ Ozone 42

Wow! Thanks for telling us that, I've never heard of that before. I don't know if they do that in the UK, but that sounds definitely unfair to me. Have you ever called your bank to question it?

I had an account at a bank once where they had a policy of doing ALL withdrawals FIRST, and then posting any pending deposits...

So if I had $100 in my account, deposited $400 to cover bills and then they came behind and requested $450 in bill withdrawals, they would put me in the hole by $350, add on OD fees for EVERY transaction, then deposit the $400 which would STILL leave me in the hole.

The manager told me all of this with a straight face as if it were NORMAL. I closed the account after 2 weeks there.

Now THAT is EVIL. ;)

You could always buy a big mattress to stash all your cash in. ;-) It sounds like you've got it pretty rough over there.

debtguru,

I've talked to a couple banks about it, but it's not a decision of a local manager, it's a chain wide thing.

The last time it happened to me, I questioned it, because I knew what order I had done the charges in, and they were even across a few days. The excuse was "this was the order they were submitted to us in," which was a lie. The statement I received later showed them coming in the way I thought they should. I didn't fight it beyond that, I got all but one of the overdraft fees credited back to my account. Really that sort of thing should be fined/criminalized.

Chase does it, Bank of America does it, Wells Fargo does it, Wachovia does it, Washington Mutual does it.

Arvest does it...

Banks aren't evil. People are just irresponsible with money.

I haven't had to pay an overdraft fee in three years.

Because I haven't overdrawn my account.

Keep track of what you have, and don't spend more than that. That's all it takes.

Although RightOn I have to admit, that sucks what your bank did to you.

They're not my bank anymore :)

My current checking account hasn't dipped below 0 since I opened it so I'm all good.

Ex-bank. 'Scuse. :D

I think what pisses me off is that I've never not had enough money for anything I've bought. I may have not had enough money in that account -- but I always had the cash in a savings account somewhere.

Unfortunately "overdraft" seems to mean anything. Even though I have "overdraft protection" where my money automatically gets transferred to my checking if I don't have the cash, I STILL get hammered for a fee because I've "overdrafted" In today's technological, automatic-transferring days -- how is this ethical? It's clearly extortion.

I also get very frustrated at the fact that while my deposits take 2-3 days of "pending" (even EFT), my debits take place IMMEDIATELY (regardless of whether they say they are pending or not).

The end result is I always make sure to have about a $1k buffer in my checking account. Which is ridiculous.

Does anyone have a good example of a bank policy they've run into to help balance this out a bit? :) I don't think all banks are evil.. but some have some ridiculous policies.

A good policy? My bank will put a cheque (check for non-Brits) into my account straight away. As in, I can withdraw against it almost immediately. However, if the cheque does bounce and I've withdrawn against it I'm screwed. But is nice to not have to wait several days for a trusty cheque to clear. I'm not sure if this is common in other countries, but I think it is not commonly practiced with UK banks.

Oh, and I get free pens from my bank. They even have a sign up saying, "Go on, take one, we won't mind."

Free pens are great. I always feel uncomfortable helping myself to them though. Same with magnets. And yes, I am aware that that's why they're there.

Credit unions (in the US) and NOT banks are the way to go, especially for a mortgage and car loan. The reason why is that they exist as non-profits and value communication. Their monthly newsletter always has lower interest rates than banks written in words even I can understand. Bank officials there know my name and chat about the weather. They have free pens, too!

I love ING Direct... Great interest rates, low hassle. Only 2-Day check holding for Electric Orange accounts.

Today I got a new "gold" debit card from my bank.

I'm not sure what to make of it, after all it's a debit card, but I'm sure there's something evil behind it.