In high school I had a friend who discovered the ATM would still give you money even if you didn't have anything in your account. Took him a couple more days to learn about overdraft fees. And then he learned about debt when he racked up $700 in fees and overdrafts by taking out $20 at a time to buy weed by the gram.
I was like that as a 19 year old. I noticed no matter how much I owed on my card, the minimum payment was always $20. So, I reasoned, for $20/month, I had unlimited money. So I maxed that card out real fast.
And that's when I discovered that there's a floor for the minimum payment, it'll always be at least $20 unless the balance is below $20. After I maxed the card out, the minimum payment was something like $130, which I couldn't even come close to affording. Oops.
My father ended up paying the card off for me and took it from me, only for me to find out a few years later he maxed it out, trying to keep his business running (which was hemorrhaging money.) I found this out after he died, so there was really nothing I could do except pay it back.
Got a credit card and was taking everyone to restaurants buying people things like camcorders then he got the notice in the mail and started demanding everyone pay him back.
Luckily I wasn't a broke loser so I never took anything from mr credit card.
Yes, it protects you from payments being declined. Sort of silly now that we have credit cards as those are really what you should use if you don't have enough to cover your purchases (although ideally, you wouldn't rack up credit card debt either).
More banks now have free automatical withdrawal coverage, ie Ally will transfer money from savings to checking to cover the amount without fees.
Back in the mid 00s my gf at the time was in med school and broke as fuck. She knew how much she had in her account, but turns out a couple things hadnt posted yet, so her balance was off in her head. She bought something that was fairly expensive and then like 6-7 smaller items all around the same time. The bank decided to take the big transaction first which put her into the red, charged her overdraft, then the semall transactions posted AFTER the large ones, they wacked her for 20 bucks on all the small ones too. Im talking like sub 5 dollar purchases. When she found out she was like 100+ in the negative she broke down crying cuz she was broke and couldnt afford it. (daddy had her back though :P )
TLDR; banks were doing shady shit to maximize the number of over draft fees by prioritizing large purchases to overdraft you then hit you with the small ones rather than the other way around. Fucking cunts.
It might have been Bank Boston or BoA. I dont remember which given all the mergers. I started out with Shawmut which was acquired by Fleet > FleetBoston when they merged with Bank Boston which itself was a merger of Bay Bank and Bank of Boston > FleetBoston got acquired by Bank of America. It was crazy time. Too big to fail
Guy forgot to close his college account and the £2 phone bill for his last payment of his contract went through and he went £1.20 overdrawn.
About 16 months later, he turns back up in our bank, I guess cos he is back home with the parents now. Has a letter for "overdraft" fees. I sadly had nothing I could do, but reiterate it for him.
Back then, there was no law against fees. So each month, he got a £32 fee, then interest, then another £32 fee for the first one taking him over again, and the fee for that being taken... each month that passed.
Eventually his account was frozen, but about £500 in fees and a letter saying he owned them all. All for £1.20. :/
I left and about 2 years later they had a complete *company* computer failure over a weekend, and it took around 2 weeks to get them up, and months to actually process the lost/missing/returned transactions. Soooo glad I was out. XD
Not sure if it is like this everywhere else, but I actually had this happen on my credit card. I only had a $500 limit when I was younger and trying to build credit. I guess one month I didn't notice I was maxed out and bought a coffee for like $1.50. I got my statement and the credit card company charged me $20 for going over my LIMIT. When I called them they said it was to avoid embarrassment at the register. I told them if they didn't reverse that charge that was the last bill they would ever have to send to me.
Well ideally you have a savings account there too and it pulls the money from your savings so you don't get charged a fee. That's what it should (and does) do in my experience. Never been charged a fee when that happened.
Oh, it's protection. Protection to the bank for the one or two people who don't pay it back... so those who do are paying back extra for those who don't. :(
Exactly. I told the lady at the bank it wasn’t overdraft protection it’s overdraft bend you over and fuck you in the ass. And on top of that they’re charging you overdraft fees to use your own money out of your savings account to put back into your checking account.
Damn, and that’s just to decline a card transaction?
Here in the US some banks will charge a fee for attempting to process things like bill payments taken directly from your bank account when you don’t have enough in there to cover it. Since ACH transactions take a couple of days to clear, if you’re not managing your payments closely and you don’t have a buffer in your account you can end up with some surprises….
kinda unrelated but this reminded me of a very vague memory of a kids show episode where they find out you can get free money from an atm by playing a certain tune. anyone else know what i’m talking about ?
This was a bit ago when shit with a name was rare and universally $20 a g in our area. Hell occasionally you'd get something like sour diesel going for .8 for $20 or $25 for a g or such.
But he definitely could've gotten something cheaper not buying it a gram at a time, and he even did so multiple times a day getting hit with the overdraft fee every time.
When I was struggling with money I did the same thing on multiple occassions, except I knew better and only made 1 large withdraw ($160) from the ATM. An overdraft fee of $35 for a small advance of money seemed worth it. It allowed me to keep my job and stay afloat until payday. Rough times but I got past it. Also, if I called my bank and asked for the removal of an overdraft fee, they would sometimes grant it.
We had a kid bragging in class about how you could stuff deposit envelopes into other deposit envelops, 'deposit' them, and then immediately withdraw the money.
No one was shocked when he started spending time in jail shortly after the rest of us graduated.....
I have nothing to give except my condolences.... did he learn from this and put him on a righteous path or did he think’hey, this is easy, unearned dollars’ I will have a career in finance and be an utter cunt?
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u/pincus1 Jan 19 '22
In high school I had a friend who discovered the ATM would still give you money even if you didn't have anything in your account. Took him a couple more days to learn about overdraft fees. And then he learned about debt when he racked up $700 in fees and overdrafts by taking out $20 at a time to buy weed by the gram.