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inthematrix

Debit Cards are Dangerous!

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I think some of this stuff is starting to click for me. A few weeks ago, someone said in passing in one of their posts, "debit cards are dangerous." I don't remember who it was, but I remember thinking at the time, "Huh? How?" I thought about how I used my debit cards (both personal and business) for almost everything, how convenient it was, how I didn't even have to worry about whether I had the funds to cover every charge because my bank paid it anyway... Oh.

 

Then I started thinking about how often I slipped up and used the debit card for something before I'd made a deposit or transferred funds, how often funds that had been authorized (but never used) on my debit card would throw off my balance, how often I saw "NSF/re-entry" fees on my account when it was showing a POSITIVE balance...

 

So I sat down and went back through all of my personal and business bank statements since January of this year. I added up every single NSF fee and re-entry fee they've charged me over the last 8 months, and the total made my blood run cold. $5,500.

 

Five THOUSAND, five hundred dollars.

 

In the last year I've handed almost $6,000 to my bank for the convenience of using their debit card. It just about made me sick to think about what I could have done with that money.

 

So I determined that was the last time it would ever happen. For the last few weeks I've used my credit cards almost exclusively. I pretty much maxed out my two main cards. Then before each card came due, I double-checked to make sure I had the funds available in my checking accounts and I paid the cards in full. Zero balance on my credit cards. Zero NSF fees from my bank.

 

The debit card has been moved to the back corner of my wallet for emergencies. It will never be my go-to card again.

Edited by inthematrix

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The moment I got my first credit card I did this as well. Debit cards really are subprime and they really are the banks way of tricking people. I keep one of my many debit cards in the back of my wallet just in case but I always use credit over debit.

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dude, you need over-draft protection.

I asked about overdraft protection a year or so ago. Until recently my credit scores weren't high enough to qualify. However, I just found out the other day that I could have been using my savings account as an overdraft fund, which really pisses me off. Back when I first asked about it and they checked my credit and said I didn't qualify, I had a pretty healthy savings account (still do) and NO ONE there mentioned it could fund the OD protection. I guess they didn't want to stop the gravy train.

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The first year I had my business I paid 5/3 bank about 7 times that much. I did throw up when I did my taxes and realized that. Hundred fifty thousand in sales the first year, in an internet business, and I'd paid over 30 grand in bank fees. Most of it wasn't the debit card, but the way 5/3 did deposits AFTER withdrawals. They just settled a class action suit for those practices back then. But, plenty was drop shippers hitting that debit card hard at will. I had a piddly $100 OD LOC, but it was never enough. Ah, the stupid decisions we make when we're too busy to pay attention.

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Oh yeah. This was a real source of major bank profits. Now you have to opt in when you open a bank/debit card account. Banks hate it.

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dude, you need over-draft protection.

 

NEVER GET OVER DRAFT PROTECTION

 

 

I paid all my bills with my debit card, and my debit card got stolen, so guess what happened? They WIPED OUT MY SAVINGS COMPELTELY AS WELL!!! not only did it take my bank 7 days to put my money back in my account, my apartment rent check bounced so they NEVER took another check from me, and EVERY bill which was set around first of the month I had to spend months explaining the stupid situation to get my late fees waived.... if I DID NOT have overdraft protection I would've had money in the savings to transfer over to control my bills.

 

in all and all just try to keep better records of your fiances. I save all my receipts and make records. Especially since Bank of America likes to do a disappearing magic trick with my account. Where posted items would disappear and reappear on few days later, making me THINK i had more money then hit me with more fees.

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My credit union is pretty good with overdrafts. I have several savings accounts linked to my checking. If an item is posted that brings the account past zero, it pulls from the savings account and charges me a small 1.50 fee per item. I think I've done this once in like 5 years. I use my debit card on occasion, but pretty much all my daily charges go on my amex charge cards.

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My credit union (Golden 1 in California) cancelled my overdraft protection when I opened up my $1500 secured visa cc with them last year. They had a $500 courtesy pay they would do for a fee for overdraft. I thought it was pretty chinzy for them to do it, but I haven't been overdrawn in many years, so it didn't matter. I don't qualify for a debit card because they run a credit check to get one and my scores were never high enough to qualify (but I don't know what score they want either!). I've lived without a debit card for many years and don't really want one!

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Five THOUSAND, five hundred dollars.

 

 

 

I went through the exact same epiphany a little over a year ago. However, my charges were only (compared to yours) $2,500. I realized I was never going to get ahead in life living reckless like this. I now keep a register and compare that to online banking to make sure everything is correct. I also use cash more often for smaller charges. I rarely overdraft now. (And since I now have a secured credit card, I have turned off the overdraft option on my debit cards, just in case.)

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So I sat down and went back through all of my personal and business bank statements since January of this year. I added up every single NSF fee and re-entry fee they've charged me over the last 8 months, and the total made my blood run cold. $5,500.

 

Holy crapola! Once you've gone a few months with no NSF fees, you should take a chunk of the 'saved' money and apply it towards a secured card for a higher limit. "Free money" right? :)

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My credit union is pretty good with overdrafts. I have several savings accounts linked to my checking. If an item is posted that brings the account past zero, it pulls from the savings account and charges me a small 1.50 fee per item. I think I've done this once in like 5 years. I use my debit card on occasion, but pretty much all my daily charges go on my amex charge cards.

 

I'm no angel, I used my former bank's courtesy line as well, sometimes spending nearly $200 a month in fees. I've since learned to look out for my own best interests and I'm much more careful.

 

Why anyone would do business with some of the Scum of the Earth banks is still beyond me. As this poster said, there's MUCH better ways to bank.

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in all and all just try to keep better records of your fiances.

 

Luckily, my fiances don't know about each other yet. :P

 

It's ok they don't have to be fiances, you can get concubines, girlfriends, mistresses, wives ;)

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I'm very anti-OD protection. Setting aside the nightmare of having your debit card linked to not only your checking account but also your savings, many banks and CU's charge an OD fee instead of an NSF fee when you access it. Talk about adding insult to injury, can you imagine having a thief drain your checking and savings and having to pay a fee for that?

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[quote name=scrubs' timestamp=

'1315607742' post='4533726]

dude, you need over-draft protection.

 

...with the right bank!

 

#1) Get control of you finances. I have one of those evil spreadsheets called a budget. I know where my money is going and when.

 

#2) My bank (USAA) does NOT charge a fee for OD transfers. They move exactly the right amount to zero my balance. In the past year, I have had 2 OD transfers caused by the combination of an autopay of a bill and the change in direct deposit of my pay (I changed jobs.) That let me know it was time for some adjustmemts of my autopay settings.

 

#3) I always know how much I have to spend. If I am not sure my balance can cover a purchase, I either (1) do NOT purchase the item or (2) if it is "necessary", I charge to my Navy CC and pay of next paycheck.

 

Being once married to a man who thought less than 10 NSFs in a month was a good month :blink: I long ago learned to stop giving my money to the banks!!!!!

Edited by Momof5

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[quote name=scrubs' timestamp=

'1315607742' post='4533726]

dude, you need over-draft protection.

 

...with the right bank!

 

Being once married to a man who thought less than 10 NSFs in a month was a good month :blink: I long ago learned to stop giving my money to the banks!!!!!

 

The girl not only changed banks but changed husbands. Good tip! :yahoo:

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Guest SoFLi-ne

[quote name=scrubs' timestamp=

'1315607742' post='4533726]

dude, you need over-draft protection.

 

...with the right bank!

 

#1) Get control of you finances. I have one of those evil spreadsheets called a budget. I know where my money is going and when.

 

#2) My bank (USAA) does NOT charge a fee for OD transfers. They move exactly the right amount to zero my balance. In the past year, I have had 2 OD transfers caused by the combination of an autopay of a bill and the change in direct deposit of my pay (I changed jobs.) That let me know it was time for some adjustmemts of my autopay settings.

 

#3) I always know how much I have to spend. If I am not sure my balance can cover a purchase, I either (1) do NOT purchase the item or (2) if it is "necessary", I charge to my Navy CC and pay of next paycheck.

 

Being once married to a man who thought less than 10 NSFs in a month was a good month :blink: I long ago learned to stop giving my money to the banks!!!!!

 

:unsure:

 

OD protection is a hybrid banking product that (from what i hear) takes $ out of your savings to cover it, a la BOfA. With OP's NSFs, he would have qualified for the "Minimum Balance" too.. :o

 

I have been entered onto Chex some time ago for the same type of thing. I now have a checking account i am perfectly happy with, and i care not that it is in Utah and i mail my checks in! I am still paranoid to go into a new bank, though either right now or the end of next year is (5 years 6 months) from when it all began to fly.

 

I now use cash more, i use Walmart cash back not ATMs (saved like $5 in fees, $2.50 from my bank and up to $2 for the ATM though i like the $2 ATMs) and i use my credit cards for a lot of everyday purchases, then pay the credit cards.. high balance can result but guess what i leave my Checking mainly for DEPOSITS< such as my paycheck, and paying the credit cards. That is primary debit card activity. Now i need to get some more checks to mail out, and im good! :)

 

They also waive one fee a year complimetarily.. :rofl: I have been there, for the past few years. I havent overdrafted in some time I have made the transition. :good: So, in a roundabout way, im trying to suggest that, although i used to be the person that also overdraft every week and also overdraft three and four times at once sometines over something as minor as a $1.89 can of Red Bull i would overdraft $35.. that personal responsibility can also solve the issue... not trying to be mean there.. i have been there, now i am a responsible user.

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I had overdraft protection with my checking linked to my savings until 2-3 months ago. I had 2 credit cards go missing waiting for them to be shipped through USPS. It made me think, "If that were my checkcard lost/stolen in the mail and someone used it they could clear out my savings!" I quickly cancelled. I don't believe in overdraft protection anymore as I know and watch what's going in and coming out of my account. Extremely leary of OD protection now.

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in all and all just try to keep better records of your fiances.

 

Luckily, my fiances don't know about each other yet. :P

 

It's ok they don't have to be fiances, you can get concubines, girlfriends, mistresses, wives ;)

 

:lol: That many women might make anyone crazy!

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