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Originally Posted by Lady Sage
I love it when people overdraft, they pay my salary! On the flip side I do counsel against it and try to get people to quit. While I like having them pay my salary, I do not like having them end up on ChexSystems and in collections. Very few banks will mess with people on Chex. Some banks even report them for a single overdraft which I believe is a farce, but its their business to run right?
Most places offer overdraft protaction and more and more banks are offering an opt-out for the negative debit card trannies. Reason they allow it is what if there was an emergency???? You would likely rather have the funds and the fee.
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I would bet that most--probably nearly all--overdrafts come not from emergencies, but simply lack of discipline. It is so easy to pull out the plastic and not write down the withdrawal. It's especially bad if you also write checks on the same account, when a check mailed off might take a couple of weeks to get back to your bank. You call the bank, and it tells you have $$$ balance, but the bank can't tell you that some of the kiddies are still out on the street.
I have a housemate --a professional woman with a Masters Degree who makes GOOD money-- who can't figure out how a checkbook works. When I started to help her she hadn't actually balanced her checkbook since she opened the account four years ago. In 2005 she paid over $1000 in overdraft fees. We had it all straightened out and balanced in February of this year, but in May I noticed a couple of those overdraft slips in the mail again. Her bank must love her, she has her paycheck on direct deposit, so the bank always gets its pound of flesh first. To to me this overdraft habit is like taking twenty dollar bills and running them through a shredder.
Lindy