Who’s Holding Your Money? Posted
by money mom at 05/19/08 12:25 PM
These days, we’re all trying to make every dollar stretch a little farther. But it doesn’t help when debit holds freeze access to your money for a few days. What’s worse --when you get hit with overdraft fees or NSF (insufficient funds) fees because of debit holds.
Here’s an example of how a debit hold can cause havoc with your finances:
You check your balance on-line and see you have $100 in your checking account. You stop at the gas station, and swipe your debit card at the pump to pay for a $40 tank of gas. With $60 left in your account, you pay for $55 in groceries later in the day with that same debit card.
No problem? Wrong. Because you paid with a debit card at the gas pump, the gas station may have put a $75 “freeze” on your checking funds to pre-authorize your gas purchase. That freeze doesn’t immediately disappear – it can lock up your money for up to three business days.
Meanwhile, you now may be hit with a $35 overdraft fee for those groceries and any other purchases you made on insufficient funds. Recently, federal regulators have proposed putting an end to such overdraft practices. You shouldn’t be hit up with overdraft fees or insufficient funds because of a debit hold. After all, the money is still yours. And, banks shouldn’t allow you to overdraft funds unless you opt-in, or ask, for overdraft protection.
You can let the Feds know how you feel about overdraft practices by visiting www.CreditCardReform.org. Real people’s experiences with the banks and credit card companies prompted The Federal Reserve Board to propose tougher rules. Writing to them now will make sure they happen.
We’d also like to know about your experience paying with your debit card at the pump. Our quick survey will better inform us on how common this practice is. The more we can put the pressure on regulators and lawmakers to give consumers a break, the more good news for our wallets and pocketbooks this summer. After all, it doesn’t look like gas prices will be coming down anytime soon.
comments
(3)
1
Posted by Jennifer Weaver at 06/21/08 10:09 PM
I had no idea they were doing this, and that they even could do this. I never let my account get that low, so this should never adversely affect me. But I do know a lot of people who could be seriously affect by this. Thanks for this article - I am going to pass it around work!
2
Posted by John Oktaymen at 08/22/08 12:56 PM
I bank with WAMU. Unfortunately I do at times let my account get that low. This usually happens right before I get my direct deposit in. What gets me is my bank will hold debit/credit transactions and checks until my account is low. Then ALL these transactions will come in at once. If I forget a large check I wrote 2 weeks ago, I'm screwed. Checking my "available" balance does not help neither. As I've come to find out that is not truly my "available" balance because there may be transactions not yet posted. But their is a problem with this too. I check my account on Monday until midnight and onto Tuesday morning, no transaction. Then later Tuesday I see the transaction but it is posted for Monday! I've paid close to a $1000 couple years ago on overdraft fees. I'm doing better now but they still get me time to time. Anything legal I can do?
3
Posted by money mom at 08/25/08 01:35 PM
Consumers Union does not provide legal advice.
We do recommend that you submit your complaint with an agency to inform them of your problem with your bank. We have provided a link to our "complain about your bank" webpage: http://www.consumersunion.org/pub/core_financial_services/001370.html
