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The New York Times has a nice front page article today, September 9th, on the dangers of debit cards. The problem? Overdrafts. I got into this problem a few years with Wachovia. A deposit that I made didn't clear for a few days, even though the deposit was recorded. In the meantime, I made 4 small purchases, each for less than $3. But because the bank argued that the money wasn't available, I incurred FOUR overdraft fees of $34 each.
I was mortified. I called to complain and the bank refused to help. On a graduate student budget, it took me a long time to recover.
To prevent that from happening again, I signed up for overdraft protection. Under this service, any overdrafts would come from my Wachovia credit card. What wasn't explained to me was that there was a $30 service charge every time this kicks in. In addition, the bank then collected finance charges as well, unless I paid if off by the end of the month. Since I was carrying a large balance on my card already, it took a long time to clear those charges. Really, I was only able to do it by transferring the balance to another card.
What can you do it about this? You can ask your bank to turn off any overdraft mechanisms they have. BUT, at the moment, they are legally allowed to continue what they call "overdraft convenience." In other words, you might ask to opt out, but they might say no. You're in a stronger position to ask if you call now, when you don't have any overdrafts.
Read this article at the NYTimes, and also look for the accompanying video.
I was mortified. I called to complain and the bank refused to help. On a graduate student budget, it took me a long time to recover.
To prevent that from happening again, I signed up for overdraft protection. Under this service, any overdrafts would come from my Wachovia credit card. What wasn't explained to me was that there was a $30 service charge every time this kicks in. In addition, the bank then collected finance charges as well, unless I paid if off by the end of the month. Since I was carrying a large balance on my card already, it took a long time to clear those charges. Really, I was only able to do it by transferring the balance to another card.
What can you do it about this? You can ask your bank to turn off any overdraft mechanisms they have. BUT, at the moment, they are legally allowed to continue what they call "overdraft convenience." In other words, you might ask to opt out, but they might say no. You're in a stronger position to ask if you call now, when you don't have any overdrafts.
Read this article at the NYTimes, and also look for the accompanying video.
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