Social Question

XOIIO's avatar

Why is my nsf fee so high at my bank? (profanity)

Asked by XOIIO (18118points) July 11th, 2014

This has pissed me off for a long time, but now more than ever, thanks to paypal and fucking fourth of july.

My bank charges $45 for non sufficient funds, fucking brilliant right? “Oh this guy didn’t have money, let’s fucking charge him more”.

So, I bought a few things on ebay, through paypal of course. These purchases were all on the third or the second of this month.

Now, the other day I had 11 bucks in the bank, did some pc work, put in the $30, and I have -$44, which makes no sense.

I call up paypal since five different payments were charged to paypal on the 7th in a row, with no fucking record of it, turns out, the main purchase,(for three of them) and not the shipping, because it was a holiday, though all these transactions were made through paypal, so that makes no fucking sense.

Then, a couple days later, my bank account is down to -$94, another fucking $45 nsf fee, so whatever $100 I make next will basically disappear into the fucking void.

And now, I get an email from paypal, due to nsf fees, the funds were “returned”, so I have a – $49 balance on paypal as well, which means the next $150 I make will fucking disappear.

Seriously, why the fuck does a bank charge this G-D much for NSF, sure, they have to cover the cost, but ffs, charging $45 on fucking $20? Why the fuck just not charge interest, or increased interest, instead of a fucking ridiculous amount like this? They will even charge that much if you are a few bucks short of something like a phone payment, turning a $70 bill into a $115 bill.

Sigh, just so tired of this crap, being overcharged for these BS reasons, all of this due to some stupid holiday in the states that paypal takes off, though they will still do half the stupid transaction.

edit: I guess the main questions aside from ranting and getting this anger off my chest is why the hell is it such a high charge, and why did paypal do the main transaction but not the shipping, even though it was a holiday and they “don’t do any transactions” on holidays?

I’m also curious what the NSF fee at your bank is.

edit: heh, sent to editing twice for the title :P

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77 Answers

Pachy's avatar

Why? Because they can. It’s that simple. If you don’t want to pay bank charges, talk with a bank rep about ways you can avoid them and explore credit unions (which also charge but often less). Better yet, avoid as much as possible doing transactions that involve these kind of charges. I bank a lot and haven’t paid more than $20 in fees in the past 10 years.

No offense, but did you really need to use the word “fuck” to ask your question?

canidmajor's avatar

It’s so high to encourage the patrons to behave responsibly. No one is forcing you to use the bank, you have choices.
The bank has regularly informed you of their policies. If you can’t handle having a bank account, there is a mattress under which you can put your money.

Their intentions may be punitive to discourage a reckless disregard of policy, and processing your carelessness costs them time and money.

You would probably be happier without all of this constant outrage you express here.

LuckyGuy's avatar

Why do they charge so much? Because they can.

Next time don’t cut it so close! Figure a week and be sure the funds are there before you buy something.

Ages ago we had a friend who would cut it close “so he could get interest on his savings.” he paid everything by check. (I told you this was ages ago.) He wrote a lot of little checks and then one large one that happened to be NSF. Rather than charge the $10 bounced check fee for the large one, the bank charged $10 each for the little ones. Yeah, keepin that money in savings saved him a lot of interest – not.

XOIIO's avatar

I wasn’t cutting it close, and I wasn’t being careless, I was watching my bank account as I was making the purchases, and had worked out if I could get them, the issue is with the stupid fourth of july, and paypal only doing half the stupid transaction.

If it’s a holiday and they don’t do any transactions then why the hell did the main payment go through and not the shipping?

jca's avatar

Not sure what you charged but maybe it was stuff you could have postponed?

Also, look into getting “Overdraft Protection.” I have it, and my checks don’t bounce. Not sure what the requirements are to have it, as I was offered it with a large balance I have at the bank. You should look into it. It may be worth it for you to keep the balance in the bank and not have to worry about checks bouncing and stuff like that.

Also, you may want to take the curse out of your question. For someone who scrolls through the feed while at work or someplace where someone’s watching, it could cause them trouble. I understand you are mad, but is the “f” word really necessary to ask your question?

Believe me, most people have been broke and/or in your situation, so we all understand. The way beyond it is what you have to work on.

XOIIO's avatar

@jca Yeah just got it sent to editing and changed the title accordingly.

dappled_leaves's avatar

That actually sounds like the standard charge for NSF transactions. My own bank charges $45 for this.

But after reading your story, I have a feeling that if you call your bank and explain the situation (calmly, respectfully, and without the profanity), they’ll refund at least one of the NSF fees. It sounds like this was a combined effect of errors and bad timing.

Darth_Algar's avatar

If you are being careful and really keeping track of what is coming out of your bank account this should not be an issue no matter on what day the transactions are processed. Yeah, shit like this has happened to me too and it’s always been my fault for not paying attention and not keeping careful track of what’s coming out of my bank account.

LuckyGuy's avatar

@XOIIO You would be doing others a service by mentioning the bank by name. Others can chime in and tell how their banks handle insufficient funds and charges.

Banks need to make money to pay for their buildings and salaries for workers (and huge salaries for CxO level big shots. They are providing a service. Unfortunately the people who can least afford it who get hit with the highest charges.
I have never had a check bounce. Never! I do not pay ATM fees. (I take out a few hundred $ at a time). My credit score is excellent and my balance is high enough so I pay no fees.

XOIIO's avatar

@LuckyGuy TD Canada trust. Not sure how many other Canadians are here.

Seaofclouds's avatar

My bank charges $29 for their NSF fee. What you described is standard practice at every bank I’ve ever been with. The fees vary from one place to the next though. You can shop around and compare bank fees and how they handle overdrafts.

GloPro's avatar

I asked Wells Fargo to stop letting charges go through if there were insufficient funds, thinking I could deal with the vendors directly and save myself the $35 overdraft for being $1 short. I was told that they will ALWAYS accept auto-draft charges that I have set up, and the only way to cut that off is to contact the vendor directly or pay them $31 to stop payment on the auto-draft. There are some companies that I do not want to do business with that have auto-renewed my subscription, service, etc, like AVG or magazines. They have cost me overdraft because I was not aware that the money was coming out and didn’t calculate it into my balance. My auto policy, which I pay semi- annually, also got me with auto-draft. I would much rather them deny the $560 withdrawal than put it through. Well, Wells Fargo just has to “protect” me by paying my bills if I have set up a bill pay, regardless of my funds, and refuses to deny for insufficient funds.

They will also cash every check I write, which concerns me. Apparently that is somehow also to “protect” me.

Only my debit card will be rejected for insufficient funds.

Wells Fargo is the most uncooperative bank out there. I have one checking account that I have had for years, which my part time job deposits my checks into. It’s my fun money account, but I’m going to have to close it because after 10 years with it and the surprise auto-drafts from companies I’ve dealt with once and no help shutting off auto-draft, incurring me $35 fees multiple times a year, it’s become a pain in the ass. It’s like getting a new email because somewhere along the way you’ve lost control of your old one, which is now just full of spam.

Darth_Algar's avatar

I could be mistaken, but I believe my bank (TCF) charges a $35 NSF fee.

hominid's avatar

Somewhat relevant old Louis CK clip.

elbanditoroso's avatar

Without getting into all of the moralizing, let me give a little background on why they charge what they do. This is not in any way an excuse for the banks, just an explanation.

The very simple answer is that your overdraft fees (which are inflated) are paying for free checking for the new customer that walks in.

A bank that services a customer has real expenses—check processing, debit processing, computers, servers, the works. Those cost real money. But banks also need customers – new ones that bring in new money. So what banks do is have really competitive checking and savings accounts (my bank has 2 different free checking accounts and then a bunch with a monthly fee that has other benefits).

But something has to pay for those freebie accounts. So they sock it to you and others with a bunch of penalty fees. Your overdraft (and other peoples’) is what pays for the other overhead fees like advertising, promotion, and free accounts for others.

Let’s be fair here – when you overdraw your account, it does in fact cost the bank money – in terms of creating an exception to processing that requires human handling and returned transactions. So there are real costs. And you should be expected to pay them.

The real question, to me, is not there is a fee in the first place – there should be – but what is the size of the fee. My guess is that the real costs of special handling is around $20–25. But I don’t know that for a fact.

Aethelwine's avatar

My bank charges $25. It’s a smaller local bank in a farming community. I do feel your pain because I’ve been in your shoes many times. One little mistake which can easily be made when you live paycheck to paycheck and you’re in the hole with more than one person/business.

jca's avatar

@XOIIO: Was what you got (that you didn’t have money for) so urgent that you had to have it?

GloPro's avatar

@elbanditoroso I call bullshit.

“61% of bank profits from consumer checking accounts come from overdraft and insufficient funds fees” source

And why they cannot respect my wishes and disallow any withdrawals on my account that exceed my balance is beyond me. Before the age of computer technology, if I didn’t have sufficient funds, my bank rejected the payment. Period. Computers make things easier. Don’t tell me they couldn’t reject an attempt to draw my money on insufficient funds. It’s a “policy” and nothing more, set in place to make huge profits off of the middle and lower classes.

JLeslie's avatar

Most bank charges are disgusting. The most offensive is a charge for low funds sitting in an account, not to be confused with insufficient funds.

People with the least money are charged the most, it’s horrible.

Banks also are allowed to hold onto our money longer in limbo in America compared to most countries. If we deposit a check there is a hold on the money for days.

I don’t know what you were buying, but if it wasn’t food, water, car parts to be able to get to work, or a work uniform, I think you need to get a bigger cushion of savings before you go buying things that are not necessary. You live too close to the edge financially to not know how all the fees work to avoid them. You need to be more careful, even though I agree the banks are theives.

One of my banks dropped my interest rate to .02%. Seriously? I’m closing my account. It’s so unscrupulous.

livelaughlove21's avatar

Because banks are businesses and they make a lot of their money off of fees. The best way to avoid them is to only spend money when you know you’ve got it. Sucks, but ‘tis life.

dappled_leaves's avatar

Yeah, as to why banks charge the amounts they charge, clearly this is entirely arbitrary. As in most fields, they are charging what the market will bear. If a number of their clients change banks because a specific fee is too high, they’ll adjust it.

NSF fees are easy for banks to hike up, because for most people, they’re charged very rarely – so they will receive no complaints from the majority of their clients. On the other hand, clients who are getting a lot of NSF charges are unlikely to complain or to have the confidence to apply for a new account at a different bank (possibly with good reason). So again, no complaints.

jca's avatar

I had a check bounce about 8 years ago. I bought something from a coworker for about $1500. I transferred the money from savings to checking via the ATM. I wrote the check and it bounced. I contacted the bank and discussed it with a customer service rep. The problem was that the money immediately came out of savings, but because of the stupid bank rules, it is not credited to checking until the next day. I told the service rep “It’s not like I took the money out of the bank. The money remained in the bank. It’s just that you took it out of savings right away but didn’t credit it to checking until the next day.” They reversed the bounced check fee. I still had to explain to my coworker what happened, but I didn’t feel like a total idiot, as I felt like it wasn’t really my fault.

dappled_leaves's avatar

@jca This is why I think he should call. Banks seem to deliberately choose to remove funds promptly, but deposit funds at their leisure. They benefit when no one notices, but are usually quick to offer a refund when one calls to complain.

Darth_Algar's avatar

@GloPro “It’s a “policy” and nothing more, set in place to make huge profits off if the middle and lower classes.”

Yet being careful with one’s account easily avoids this policy.

jca's avatar

That’s why I am curious what @XOIIO ordered. If it was something arbitrary like “fun” shopping, it could easily have been avoided.

LuckyGuy's avatar

Somebody has to pay for his salary. Source

Timothy D. Hockey, Chief Executive Officer and President, 85 Board Relationships
Salary =819.4K
Bonus =1.0M
Total Short Term Compensation =1.4M
Total Value of Options =20.1M

GloPro's avatar

@Darth_Algar I don’t disagree with you. However, that is not the question. It’s easy to say blame the account holder for being irresponsible with balancing their account. My question is WHY a bank allows an account holder to spend money they don’t have?

It is just as easy for the bank to deny a withdrawal on insufficient funds.

It is an intentional, profit-driven choice to take advantage of people that are bad with money or not in a position to pay all of their bills.

The OP is not asking for judgement on what he chose to spend his money on or ridicule for overdrawing his account. He is asking WHY the fees are so high. My answer is they should have rejected the potential sale. They did not because that is how they turn huge profits. Period. But someone should make him feel bad about his choices.

Darth_Algar's avatar

It’s easy to opt-out of NSF coverage as well. At least it has been at any bank I’ve held an account with.

GloPro's avatar

@Darth_Algar If you read my above post, I specifically requested Wells Fargo to reject any attempt to draw on my account with insufficient funds. I scheduled a meeting for this one objective.

I was told that they will ALWAYS cash my checks for me. They will also ALWAYS honor my auto-draft bills for me. Regardless of my wishes, they will “protect” me as a customer by doing so. I objected, and was told that I could pay $31 per auto-draft I had set up and they would cancel them for me.

In short, they refused to disallow overdraft on my account.

LuckyGuy's avatar

@GloPro. Thanks for warning us about Wells Fargo and their refusal to disallow overdraft without a fee. That should be considered when opening a new account at another bank or credit union.

JLeslie's avatar

@GloPro Change banks. There are about 7,000 FDIC insured banks across the US.

GloPro's avatar

I do the majority of my banking with Bank of America. The Wells Fargo account is my way of keeping money I need separate from my allowance, basically. I am absolutely terrible with money. My part time job paycheck gets deposited there. I withdraw cash and spend cash. When the cash is gone, I stop spending until the next check rolls in. Sometimes I forget about the phone bill auto pay or one of those awesome auto renewals from AVG hits my account, and boom! $35 fee. It’s better than accidentally spending my rent/bill money.

I just wish I could decide for myself to only spend money I have available. It doesn’t seem unreasonable. And I understand where the OP is coming from when he is frustrated that his bank continues to allow spending when he is already in the negative. It’s irresponsible of the OP and the bank, in my opinion. How does the bank justify 7 overdraft fees? He was overdrawn after the very first overdraft fee!

JLeslie's avatar

@GloPro I don’t disagree with you that you should be able to turnoff overdraft fees, but the alternate is bounce fees. Basically the bank is saying we won’t let you default on your bills, but you need to pay us for the service. If you write a bad check the company you wrote it to will likely charge you a fee, so somewhere you get punished for it no matter what. Having the bank cover the “check” you wrote means you don’t risk your credit rating as much.

I think the fees are ridiculously and unscrupulously high, but having some sort of a fee for insufficient funds is not unreasonable. If they cover your check they take on risk, because if you never give them the money they are out. They balance the risk by charging fees. Everyone who writes checks that bounce basically funds the fund to cover the people who never get the funds back into the bank and cover the loss in revenue, because when you account is overdrawn the bank cannot be earning any money on your money. The banks are covering themselves, plus making a profit on your inability to keep your funds in balance.

I think some accounts have free overdraft services, but they are on high balance accounts.

I don’t really understand not being able to keep track of money to the extent that checks are being bounced all over. Just stop spending on unnecessary things and get a big cushion in the bank if that is possible on your income. Get a good $2k or more in there so you can be lazy about how much money is being moved around for bills etc. You are throwing money out on the street by incurring fees. Really sacrifice for two months and avoid the stress and unfairness of the system for years to come.

dappled_leaves's avatar

@JLeslie “Get a good $2k or more in there so you can be lazy about how much money is being moved around for bills etc.”

Of course! Why did I never think of that. How silly of me. And, after all, I do enjoy being lazy, so that would all work out perfectly.

GloPro's avatar

You misunderstand. My actual banking account has plenty of money. I intentionally keep this one. If I had $2000 in the account then I would spend every penny impulsively. I do every month. It’s my allowance account.

It’s the most efficient way I have come up with to control my spending. I am really, really bad with money. If it were easier for me to watch money I wouldn’t have this stupid system that works for me. The occasional $35 fee for overdraft is not the only money I throw out the window. I don’t write checks, and if I ask the bank to reject any draw on my account I don’t see the problem honoring that. My business, and any bounce fees or late fees incurred, with another company is really not any of their business to monitor for me. If I choose to shut off overdraft and instead want them to decline purchases I should have that right.

They decline debit card purchases. This is no different.

dappled_leaves's avatar

@GloPro “They decline debit card purchases. This is no different.”


XOIIO's avatar

@jca It doesn’t matter what I bought, if it was stuff that I just wanted or parts or other stuff that I need to make money, the stupid way paypal handles transactions on holidays just don’t make sense and caused this whole mess.

@hominid pretty much perfect description of my situation lol.

I like how when I was talking with someone to get cheques for rent (not even me paying it but that’s another dumb story) they said ‘Oh and we will stop taking the ~$12 monthly fee if you can get $2000 into your account.

Well shit, if I could get $2000 into my account that easily you don’t think I would have?

JLeslie's avatar

@dappled_leaves It’s not that I don’t think some people think of it, it is that some people really do think money in, I can spend it. They have a check to check mentality even if they are making a lot of money. Hell, some of those people have an overspend mentaility and live in debt even if they easily could live within their means. Many many people think it is normal to have credit card debt. Some people have no room to save, they live on very low wages, and I am completely empathetic to that, it is why I added in what I said above to save if your income allows for it. I have no idea where the OP, you, or @GloPro fall in the money realm. I don’t assume anything about income level, how smart you are, none of it. Money is different for everyone. It can represent different things to different people. Money often has all sorts of psychological and personality stuff that influences how we spend, manage, and save money. I would not say I “manage” mine very well, but I am a saver, so I have had very little problems with money in my life, except when I at one point was earning less than would pay my basic expenses, which only lasted a few months. I played the credit card float game as well as possible and avoided any fees and my dad wound up giving me some money, and finally I got a higher paying job again.

I am not judging anyone, I am just making a suggestion in case it never occured to some of the jellies out there. I’m glad it has occured to you.

@GloPro Again, I agree you should be able to shut off the overdraft protection. Go to another bank, I am sure there must be a bank out there that you can do it. I see now that you are counting on the bank to control your spending, because you are not great at it, which is very common, I have no judgement about it, it sounds like you are trying to organize your finances to control it, so in essence you are good at even thought you label yourself as not.

I have some thoughts now that you explained more. First, it is not your allowance account if you pay your phone bill from it. I am not clear which bank is which. It sounds like you direct deposit to both banks? One for your full time job and one for your part time job? Is that right? I use the phrase “write check” to include any payment out of the account like phone bills and utility bills even if it is automatic withdrawal. Why not have one more account where you deposit your part time job money? Only move money to it when the first account there has a huge cushion in it for bill paying. You have to get a cushion where the bills are going out. I mean another account in that same bank where your part time check goes.

We all throw some money on the street in sme way or another, but the bank fees are extremely annoying to you from what I can gather, and they would be to me too.

El_Cadejo's avatar

Around me, if you pay for gas on a card they don’t charge you until the following Monday. One time I was pretty low on money and didn’t realize it because I had gotten gas but it didn’t hit my account yet. On that following Monday I over drew 5 times from the gas of the previous week. So not only did I have no money but I owed an additional 175 to the bank. >_<

JLeslie's avatar

@XOIIO If you think it doesn’t matter what you bought than that is part of the reason you are having financial problems. As much as I disagree with fees for low minimum balances, like the $2k example you gave, it also seems to me you are not inclined to save money. I could be wrong, you might be like @GloPro who does save, but just manages money poorly, but to her credit is trying to have a system that helps control it.

JLeslie's avatar

@El_Cadejo Why does it matter to you which week they took it out of your account? You spent the money, it’s gone. Whether the bank takes it that day or three days later.

XOIIO's avatar

Money wise, I am trying to get a job, but barely any fucking place around here is hiring, I have gotten a couple interviews where they say “we’ll call you” or whatever and never heard back.

It’s either that, no response, or “overqualified” bullshit. (Who cares if I’m overqualified for this simple fucking job, I need money).

Right now I fix computers through kijiji, but I barely make anything off that, if I am really, really lucky, I can make over a hundred bucks for a few hours work if not less. Usually it’s a lot less than that, and sometimes cheap fucks barely pay anything.

This brings in just enough to pay bills, right now I am living with family, and can’t even really contribute to rent or food. Thankfully my grandmother’s daughter (not my mother) made a mistake and screwed up her car, so she is using my grandmother’s truck and she is using mine, paying the registration and we split gas (when I can).

And, at my latest job interview, I’m guessing that I won’t hear back because I am fixing computers, and since they do that sort of work at the store (Even though I applied for car audio installation) it could be a problem since they can’t have people doing work on the side.

Well fuck, it’s so that I can pay the bills and contribute as much as I can, I told them that it was to hold me over until I could get an actual job so that I could make more than $80 a month but the guy didn’t seem to get it.

Sigh. Life fucking sucks.

El_Cadejo's avatar

@JLeslie Because I was young ,poor, living pay check to pay check and didn’t keep track of things like I should have. So my bank showed no pending transactions when really there was five $5 transactions waiting in the wings from gas that week that wasn’t showing at all. Some gas stations however do charge right away so that’s another mental juggle you have to do.. hmmm where did I get gas on Tuesday? How about Wednesday? Have I actually been hit for all these transactions or are some still waiting?

Aethelwine's avatar

@JLeslie I don’t really understand not being able to keep track of money to the extent that checks are being bounced all over. Just stop spending on unnecessary things and get a big cushion in the bank if that is possible on your income. Get a good $2k or more in there so you can be lazy about how much money is being moved around for bills etc.

That is so easy for someone to say who has never been poor or working poor. These people don’t have money to spend on unnecessary things, and they certainly can’t easily save up 2K.

JLeslie's avatar

@jonsblond OMG. I said unless finances don’t allow for it. I said it more than once. @GloPro has money and has savings and still is bouncing and overdrafting. I know people who make $100k a year and can’t save a penny. I have been poor, I have been in a situation where I could not pay my bills. I hated it. I will do everything possible not to be in that position again.

@XOIIO That sucks. I hope you find a job soon to take the pressure off of you.

@El_Cadejo Maybe it would be better to use a credit card. You hold onto your money longer and can take your time balancing your bank account before paying the bill.

El_Cadejo's avatar

@JLeslie I learned a long time ago you don’t buy things your can’t afford right then an there. Credit card, no thanks.

My stuff is all in order now, but at the time I just found it completely asinine that I over drew by 25 and got charged 175 for it.

XOIIO's avatar

@El_Cadejo Well, I could afford them right then and there, but due to paypal, after I saw those purchases I still had money so I got something else I needed :/

El_Cadejo's avatar

@XOIIO Oh, believe me, I know the feeling. I’ve gotten fucked over by holidays a lot. One time I got an overdraft fee because I deposited a check in my account the day before some bs non holiday that banks close for so it took two days to hit. Yea too late.

Aethelwine's avatar

@JLeslie I admit I skimmed the answers and didn’t read everything that you wrote. You can’t deny that it’s a common stereotype that poor people are poor because they spend too much on frivolous items. Having been working poor, I can say this stereotype is often not true. I also get upset when people assume those who are overweight are fat because they sit around and eat chips and corn dogs all day. I’m overweight and I eat healthy and I don’t eat large amounts of food. I lack in exercise, but everyone thinks I stuff my mouth. I hate stereotypes. People become so judgemental and it irks me. I apologize for assuming you were being this way. (friends?) :)

JLeslie's avatar

@El_Cadejo it is asinine and borders on immoral in my opinion. But, if you know me, you know how extreme corporate greed makes me pretty upset.

People who aren’t great with money miss out on all the benefits a credit card can give. Back in the day when savings accounts earned decent interest I saved or made some money using my cards and holding onto the money in my account as long as possible. Now I get free hotel stays in my Marriott card, free checked luggage on my Delta card (although I am going to cancel that card soon, because of the yearly fee. Having moved from a hub airport it no longer makes sense for me).

stanleybmanly's avatar

I wouldn’t be so quick to tout the bank’s message that it charges outrageous fees to discourage irresponsible behavior. The consensus here seems to be that the bank charges exorbitant fees simply because it can get away with it. THAT’s It, period! It’s another example of how it’s expensive, being poor. Those who lack the heft to resist get picked clean. One thing is correct. Getting pissed isn’t going to do you a bit of good. A rational and level head is required to keep the tentacles of thieving banks away from your pockets. One thing to do if possible is to switch your checking account to a credit union.

JLeslie's avatar

@jonsblond I am one of the bigger voices on fluther about my upset regarding the working poor. I want everyone to make a decent wage so they can afford food and shelter and live safely and so they don’t need government services like food stamps or have to ask for charity just to get by. By not paying part of our society well we rob them of the tranquility and pride in having enough money to feel secure. It affects all of society in the end.

I think most poor people worry about finances, cut corners where they can, and if they do start to earn more money they don’t just go out and spend it all. But, there are many people who will always spend everything they earn no matter what. Even if they live in $500k house they are poor. The house is actually owned by the mortgage company and they have no savings. They live in a nice fashion as long as they can pay those monthly bills, but one rainy day and they lose everything. They are poor to me, even though they are living like the middle class. There is an expression “poor mentality” which basically means the person lives check to check no matter what income. It also Is sometimes used to refer to people who always think in terms of being an employee rather than a business owner. I use the term sometimes, but I see why it bothers some people. The poor really have no choice but to live check to check, the question is when someone does have discretionary income, what do they then do?

Sometimes I think people who are not good with money (I am not saying you personally aren’t) should not be defensive and actually listen to how people with money wound up having money. When my husband and ai were first married we had very average incomes, but we still saved. We sacrificed a lot when we were young. We, as a married couple, have never had to worry about our next meal, but we compared to many of our peers spent much much less than they did yearly. if I give a suggestion about how to save and manage money, I mean it in a helpful way, not condescending way. Although, I admit my comment to one of the jellies about him not being concerned with whether he is buying something that is a necessity or not was a little harsh, and I do think that attitude can be a problem. Some people classify some things as necessities that others wouldn’t. Sometimes it is good to have it pointed out if the other person is willing to listen to it. Internalize it. Many people think living on credit, drinking alcohol when dining out, having a smartphone, getting manicures, and buying $200 purses is all nornal. To me all of those are luxuries. Everyone spends money their own way. if they think it is nornal because their parents did it and everyone around them does it, whatever the it is, they may not realize a whole group of people don’t do those things, whatever the thing is. They also may not realize that even people with much more money than them don’t spend their money that way.

Knowing the habits of the rich can be a clue into how to be rich. My BILaws make a shitload of money and spend it like water. If they made $200k and we did also in the same year, at the end of the year we would have $100k left over and they would be lucky to be making ends meet. In ten years we would have a million dollars (that would be nice) and they would be lucky to be making ends meet. Yet, they sometimes look down on us. Our clothes aren’t as nice, or we worry about planning in advance to save money when travelling (I guess we are being “cheap” or we clip a coupon for the grocery store. All that is different than only making enough to get by. When I answered the Q I didn’t know what category people were in, I never assume.

Darth_Algar's avatar

It seems to me that the issue here is less about being poor, and more about not keeping track of your money. I’m going to guess that a lot of people now tend to rely on logging in to their account online, looking at what it says the balance is, and going by that. Marking down transactions when they’re made could probably avoid a lot of NSF fees. Wealthy or poor, it’s not difficult to keep a ledger of your bank account.

JLeslie's avatar

@Darth_Algar Exactly. If someone isn’t going to keep track they need to have a fat cushion to protect themselves from fees.

tinyfaery's avatar

Fuck the banks. Join your local credit unions. I LoVe mine. It’s like having your own personal banker. They make all types of loans, even personal loans. They have a credit card, special mortgage rates and investment opportunities.

Stop giving your $$$ to the oligarchs.

JLeslie's avatar

@tinyfaery What does the credit union do if you spend money you don’t have?

tinyfaery's avatar

You can opt out of overdraft. If you don’t have the $ they deny the debit. And the fee for over draft is something like $13. And they don’t charge for using other ATMs.

JLeslie's avatar

I was thinking about this more and I recently opened an account at PNC bank and I am almost positive they had the option for overdraft or not.

@tinyfaery Sounds much more reasonable than the banks. I have no idea what the fees are at my banks. I have money in two (three right now, but I am closing one next week, because I opened the PNC account). I keep some money in online banking also because the interest rate is much better, but the money just sits there. I’m paranoid about keeping all my money in one bank. My money was once frozen for three moths with a savings and loan scandal years ago.

2davidc8's avatar

@JLeslie You speak the truth!

trailsillustrated's avatar

That’s in Canada?? I’m in Australia and the nsf fee is 37 CENTS. I sort of thought Canada would be the same…..

jerv's avatar

Aside from mentioning that Bank of America once nailed me for $170 in fees for $26 in purchases simply due to a trick with order of operations before “losing” a $1400 check deposit, all I am going to say is that I love my local credit union. Not bank, credit union

Aethelwine's avatar

@JLeslie Jerv gave an example of how mistakes happen to anyone, rich or poor. The poor person living paycheck to paycheck will have a very difficult time recovering from one mistake that put them in the hole. This question is not about certain people who aren’t good with their money. The question is about banks taking advantage of everyone.

JLeslie's avatar

@jonsblond It’s about both. I hate that banks do that shit. They are theives. Banks don’t get to stick those fees on people who don’t overspend their account. I really don’t get the feeling most people on this Q who are getting stuck with fees don’t have the money for necessities. They are talking about not knowing how much is in their account, which is a bookkeeping problem, and they are allowing the bank to take advantage of them. They don’t know when bills are hitting and forgot they spent $80 at the gas station last week. I think if they used a credit card they would be better off, but since they self admit to being bad with money a credit card is even scarier to them I guess. That is not a poverty thing.

Certainly it is true that the poor hit one bump in the road and they get behind in everything and it is hard to climb out of the hole and banks and cash advance places and many other businesses take advantage of them. It’s disgusting. I think the government should do something about it.

Edit: I’m going to add that I don’t like to pay any extra fees, not even a dollar. I think some people think a dollar is no big deal. Or, just $5. No one should be paying a bank anything if they have money in the bank and aren’t bouncing checks. People need to move their money where they can have zero fees. Also, I never worry about any ATM fees, because I charge everything. $20 can last me two months.

jerv's avatar

@JLeslie If by “necessities” you exclude rent, electricity, gas, and food, then maybe. $80 at the gas station is a big hit for those of us who actually do live paycheck-to-paycheck; and as one-third of American households do just that, it’s not exactly a small minority.

So, by “poor”, are you talking “a large segment of the US population”?

JLeslie's avatar

@jerv Of course rent, electricity and food are necessities, but most people on this Q are not talking about those things, $80 is a huge hit of course. Maybe it would be worth recording it in a check ledger when using a debit card? A lot of jellies are talking about not realizing when a charge is going to show up on their account. That’s not what you are talking about. Also, debit cards do massive holds sometimes. I think the gas station a hold of $100 is done, or something similar, until the actual charge goes through. At a hotel, a debit card has something like a $300 for incidentals and renting a car is similar. With a credit card it isn’t a problem, because your bill comes later and most temporary holds have worked themselves out by the time the bill comes.

I don’t get the feeling people write down all their spending when they use a debit card, they rely on looking it up online and from this Q I guess there is some problems with that. I have never used a debit card so I don’t know what the accounts look like online. If someone is living paycheck to paycheck it is more important to know how much money is in the bank. Especially if there is an automatice withdrawal set up.

I do my aunts bills and one huge amount is taken out automatically monthly. It’s over $800. I really need to watch that the money is there and the wild card is she sometimes goes to the bank and pulls out money and she doesn’t know what bills are about to pay out. If I know the account is going to get low I tell her. Most charges she does on her credit card so I can look at the account before paying it.

JLeslie's avatar

I just did some googling and this article talks about a bill being introduced that would force banks to let a customer know when at an ATM if they are about to overdraft so the consumer to decide whether to go ahead or not knowing they will incur a fee. It also says that many banks you can set up email alerts so you know you are getting very low in your account.

Darth_Algar's avatar

@JLeslie is correct. This thread isn’t about being poor and living from paycheck to paycheck. It’s about keeping (or not) track of the money you do have. If you purchase gas on Tuesday and you write it down in a ledger then you’ve already accounted for the money and it should not matter if the bank deducts it from your account that day, the next or a few days after that.

JLeslie's avatar

Maybe it was better back in the day when people wrote checks, because people deducted the money when they wrote the check. Although, I hated checks as a consumer and even worse working in retail. Every time a customer pulled out their check book we dreaded it.

Aethelwine's avatar

I still use checks @JLeslie. Two years ago I made a payment by check over the phone to the university that my youngest son was about to attend. The payment accidently went through twice and the transaction made two other small checks bounce. I had enough money in my account for the one check to the university and the two small checks I wrote that day. I did not have enough money in my account for the extra transaction that was not supposed to happen. Of course the bank withdrew the two large transactions to the university before the two small transactions to local grocery stores. The added NSF fees made the situation even worse. It took a lot of my time and hassel to get the situation corrected.

None of this was my fault. This is why I say accidents happen, and the poor pay the most. I have other examples, but no time to share right now.

JLeslie's avatar

@jonsblond I agree accidents happen and the poor pay the most. I have said that all along.

That still has nothing to do with people who don’t keep track of their money. I have plenty of savings, but I don’t keep it all in checking. Having a lot in savings desn’t help me not bounce or not overdraft my checking account. If a bill went through twice I easily could be in the same bounced check situation. The banks are a pain in the ass.

I’m pretty pissed all the time that they give better interest to new accounts. That’s another we can bitch about. They will raise your interest again if you bring in $25k in new money. $25k! They don’t care if you already have $100k in the account. Fuck them.

I am not defending the banks. I am saying people also need to take responsibility. Even if the fees were lower, let’s say $5, it’s still $5 too much if the person actually had enough money, but doesn’t care to keep track of the money they spend. You are not talking about not keeping track in your example, you are talking about a double charge screw up.

jerv's avatar

Charging fees in excess of the transaction amount is a bitch. Doubly so since it is technically possible for a debit purchase to be declined, but banks seem to prefer to allow it and then charge a $25–45 fee for a $1.79 purchase instead.

As for the holds, no technical reason for that, only administrative ones. Well, unless the financial institution in question is still using C-64s for servers, but I wouldn’t bank with anybody who doesn’t use technology that isn’t at least up to the specs of 15 years ago. Though I will allow for the possibility that CEO bonuses cost too much to allow them to keep current with the technology of post-2000 society.

However, I agree that one does need to keep track of their money. I would be a fool to argue otherwise. But when what your ledger says differs from what the bank says (almost universally in their favor; deposits (even cash deposits to a teller) take days while debits/withdrawals take seconds) then there’s an issue. Not an issue that someone with $100k in the bank would even notice, but the deck is stacked against the account holder.

Again, that is why I prefer credit unions. All financial institutions are responsible to their shareholders, so having the customers as shareholders reduces overhead costs enough that they don’t need the fees that regular banks use to enrich their executives. Better service at lower cost, the only downside being that the suits don’t become multimillionaires.

So yes, banks incur the high charges they do because of high costs, but why are their costs so high? How can others get away with providing the same service at lower cost?

jca's avatar

@XOIIO: “It doesn’t matter what I bought, if it was stuff that I just wanted or parts or other stuff that I need to make money, the stupid way paypal handles transactions on holidays just don’t make sense and caused this whole mess.”

I disagree. To me, part of the problem is that you spent on something you really didn’t have money for, and if it’s something discretionary, you might want to try to rein yourself in next time. I realize people may not like to have to restrain themselves, but sometimes it is more practical than having what is referred to as “champagne taste on a beer budget.” Yes, the fees suck, but If it was something you could have waited for, you would have avoided this whole mess if you didn’t purchase it.

JLeslie's avatar

@jerv A lot of new laws went through about credit cards and debit cards a few years ago and banks felt they needed to make up for the loss of revenue by adding fees in other places. That’s part of the reason banks have focused more on more on creating and charging more fees and higher fees. They went where the law had not addressed.

Now and then people/politicians try to address the bank holds. I assume the bank makes a lot of money holding our money.

I picture them doing the happy dance in their board room as they count up all the money they make in scandalous fees and laugh as they wonder why people still bank with them. There is some collusion among the big banks, a lot of them do the same horrible shit, but there are so many local banks and as you and others pointed out and credit unions, there is some competition out there and people need to take control and shop around.

That goes for everyone here who is complaining. Money gets money! Where you put your money is like shopping for anything. Get a good deal. Take your money out of the bank if they have a sucky policy. Take it out if their interest is extremely low. If you have direct deposit with them, no matter how low your account is off and on, they love that constant guarantee of money coming in. A lot of banks give direct deposit customers benefits.

Everyone: If someone needs to check their account online to see if they can buy something that is not a necessity then I would say don’t bother checking and don’t buy it to begin with if you constantly have problems juggling money. Stop buying what you don’t need for a while and see what happens. This isn’t some punishment we are trying to dole out to those who make less money, Most of us have financially been in positions of very little money. We are giving you advice on why we have money now. We controlled our spending, we focused on savings, we didn’t buy everything we wanted. My husband still sometimes darns his socks, he still brings lunch to save money, he has not bought new work clothes in 8 years, I keep trying to get him to buy some new clothing, we still have our old big square TV’s because they still work, except for the TV in my bedroom, we usually have our phones more than two years, our computers until they die, we clip coupons, look for deals on travel, etc etc.

jerv's avatar

@JLeslie First off, forgive the longwindedness of this post, or if it seems rambling, but as economic matters are rarely simple, and often involve factors other than just dollars, I feel I have no choice but to open the floodgates a bit in order to explain my view of a complicated situation.

How I read your statement is, “People should be educated and informed.”, which I just don’t see happening. It’s quite idealistic. I won’t go on too much about how society has declined in that regard as I know you are intelligent and observant enough to have seen a bit of a decline in society in that regard; the fact that you and I can spell or do simple math in our heads puts you and I a few steps above a depressingly large segment of the population. It’s the difference between “should be” and “is” that justifies the existence of police; people shouldn’t break the law, but this isn’t an ideal world.

I mention that as many people either just aren’t capable of knowing what a bad deal is, or maybe they’re just lazy. Ideally, they would be informed and motivated enough to shop around and read the fine print, but it would be foolishly optimistic to think that’ll happen. Some people think Norton is the best antivirus software ever simply because it’s the only one many have heard of; people go for recognizable names over quality. It would be nice if they wised up, but I know from history that people will always go for glitzy marketing over good deals, and (if Walmart’s existence is any indicator) seek low prices regardless of actual cost. Call me cynical, but I don’t see people doing what you and I agree they should do. I would love to be proven wrong, but I wont hold my breath.

That puts the government in a tough spot. Their job is to protect society, even if that means protecting them from themselves. I agree with the hardcore Conservatives that government shouldn’t interfere with business, but add to that that sometimes they don’t really have a choice; government “interference” is often a consequence of misbehavior or failure on the part of enough of the business world that it’s harmful to running a safe, orderly society, thus forcing interference. But that is counterproductive on many levels as they are often a bit ham-handed, cause much unrest and confusion amongst consumers, and often wind up punishing honest businesses far more than the ones that caused the problems that required their intervention in the first place.

So, to put it in a nutshell, the real reason the fees are so high is that society isn’t really savvy enough to put up any real resistance (such as turning to credit unions and local banks for a better deal), forcing government to try and protect consumers from themselves, which in turn makes the banks get creative about how to keep their profit margins intact. A failure of society, an abuse of the free market, and government doing their duty is why NSF fees are what they are.

Also, while I get what you’re saying, and do many of the same things you do, that isn’t enough to get into the higher economic tiers any more than buying a lottery ticket guarantees wealth. And I think the reason you and I see things differently is that you have had a bit more luck in your personal life and have a more charitable opinion of the average person than I do. What has worked for you hasn’t worked nearly as well for me, nor for many other people I know who do the same things, so there’s more to it than just acting responsibly. Things are rarely as simple as they seem, which is the real cause of my disagreement with many people when it comes to econo-political matters.

JLeslie's avatar

@jerv Overall, I agree with you. However, here we are on fluther, and while I understand that many people are ignorant to their choices regarding the banking industry, and I do not mean stupid, I just mean unaware, we on fluther can inform people about credit unions and that there are banks that have better policies. We try to impart what has worked for us. When someone gets defensive and wants to keep doing it there way that isn’t working, well, it’s a little frustrating. Maybe they should just give it a try.

A separate issue is that some jellies seem to think it doesn’t matter what you buy whether a necessity or not when money is tight. We who sacrificed (I still do, but I also have many luxuries now, so I will leave it in the past tense) just really want to impart that once you get in the financial hole you are screwed at least for a while if not forever. I think @jonsblond actually had pointed something similar out, or maybe it was you. I agree that some luck plays in life, and two people can have similar methods and one winds up better off for various reasons. What I know for sure is people who never save never get ahead. A lot of them have no idea what ahead is. They dont even know to strive for it. To them owning things makes them “wealthy” not having fnancial freedom. People who live check to check get slammed with stupid fees, or sometimes wind up in debt unexpectadly, and debt costs money. The hole gets deeper. Blame the banks, but better to blame oneself, and take responsibility and then it is more likely not to happen again. Take responsibility and at the same time we can try to fight the fleecing of America by so many corporations.

jca's avatar

Good point, @JLeslie. I work in a big government department, and many of my coworkers have nice cars, fancy handbags, professionally manicured nails and yet, they don’t have $5 the day before payday.

JLeslie's avatar

@jca I think they believe if they are affording everything they are doing well. Meaning if the money lasts until the next paycheck and no checks are bouncing they are being responsible and are financially sound.

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