Question about overdraft fees

[Azndude51]

Let me just first say that I'm a college student so I'm not that experienced with money. I wrote a check two weeks ago for $67. I've had well over $300 in my checking account for the past month. Yesterday I transfered $230 from my savings then withdrew $370 cash to buy a bike from someone bringing my total down to $72.57. Then today I get an NSF fee of $28 for the $67 check. I was so confused at first since I got the fee yet I still had over 70 bucks for a $67 check. However after some research, I'm guessing it has to do with the processing order.

My question is this, what happens to the check and money? did it bounce or did the bank just give him the money anyways and then just charge me the fee? If he got the money, is the bank going to take it out of my account later?

Also, is this going to affect my credit score?

I'm just asking here until I call the bank tomorrow, thanks for the help in advance.

 

[LS20]

if you have overdraft "protection" they give him the money and you get fee assessed and neg balance

its not so much protection if it allows you to bounce ...

 

[jagec]

Call the bank, they might forgive you the first time. Be sure to complain a lot if it looks like they aren't budging. If the check was truly sent two weeks ago and you only withdrew the cash yesterday, that's pretty lame of the bank...but banks will try to ream you wherever they can.

You might want to consider getting a credit card linked to your bank account to provide overdraft protection for these cases. Be careful with credit cards, of course, but as long as you're responsible they can never hurt you. Plus, it builds your credit history...something that a regular bank account will NOT.

NSF charges won't affect your credit history, since your bank account is not a credit account. If you have no lines of credit, you may not even have a credit history. Start building one now.

 

[Azndude51]

Originally posted by: jagec
Call the bank, they might forgive you the first time. Be sure to complain a lot if it looks like they aren't budging. If the check was truly sent two weeks ago and you only withdrew the cash yesterday, that's pretty lame of the bank...but banks will try to ream you wherever they can.

You might want to consider getting a credit card linked to your bank account to provide overdraft protection for these cases. Be careful with credit cards, of course, but as long as you're responsible they can never hurt you. Plus, it builds your credit history...something that a regular bank account will NOT.

NSF charges won't affect your credit history, since your bank account is not a credit account. If you have no lines of credit, you may not even have a credit history. Start building one now.

Thanks for the info. The guy who I wrote the check to was doing a group order for some stuff for a club, so I guess he waited until he got all the checks together and deposited/cashed them all at the same time. And actually, I don't have a credit history. In fact I applied for a student credit card last week so I could start.

 

[Injury]

You'd be dumb to just take it and NOT to go down there and try to recoup your funds... because now the amount that you transferred in is already half gone. You clearly knew what you were doing, it's their F' up for not moving the money from one account to the other in a reasonable amount of time, unless their was a clear statement saying it would take longer than you allowed.

Regardless of fault, you'd be dumb to just be okay with them taking money from you and not at least TRYING to do anything.

 

[Linflas]

Originally posted by: Azndude51
Let me just first say that I'm a college student so I'm not that experienced with money. I wrote a check two weeks ago for $67. I've had well over $300 in my checking account for the past month. Yesterday I transfered $230 from my savings then withdrew $370 cash to buy a bike from someone bringing my total down to $72.57. Then today I get an NSF fee of $28 for the $67 check. I was so confused at first since I got the fee yet I still had over 70 bucks for a $67 check. However after some research, I'm guessing it has to do with the processing order.

My question is this, what happens to the check and money? did it bounce or did the bank just give him the money anyways and then just charge me the fee? If he got the money, is the bank going to take it out of my account later?

Also, is this going to affect my credit score?

I'm just asking here until I call the bank tomorrow, thanks for the help in advance.

Your friend will get the check back stamped NSF. Your money will still be in your account minus the fees from your bank. Your friend most likely will be charged a fee by his bank as well. After reading that link in your OP that sure the hell is different than the way they processed back when I worked in a bank. I guess they are looking to maximize the fees they charge people which is why I haven't used a bank in over 20 years. Like others have said I would raise hell with the bank since you can show that there was sufficient funds in your account to cover the check on the day it was written and on the day it was presented for payment and that it was only because of the screwy way they process that caused the problem.

 

[Legendary]

This is a fee you can get back. Just make a calm point, then a fuss, then threaten to close your accounts. Be sure to mention how you're just starting a banking relationship and it sure won't be with that bank. Who knows what kind of future monetary potential you may have, and they're screwing it for a $28 fee for NSF when you actually had the money? Hogwash.

At some point in that diatribe, they will cave.

 

[dug777]

My transaction account has a small overdraft facility, so this story does not compute anymore for me

However, with my previous account and as a broke student, I ended up wearing a few honour and dishonour fees

 

[SonnyDaze]

Originally posted by: Azndude51
then withdrew $370 cash to buy a bike from someone

What kind of bike did you buy?

 

[jdobratz]

Does your checking account maybe have some sort of minimum balance rules, or possibly a hold of some sort on funds in your account? Those are the only reasons I could see that they would return a draft as NSF when you had the funds in the account to clear it.

 

[Azndude51]

Originally posted by: SonnyDaze

Originally posted by: Azndude51
then withdrew $370 cash to buy a bike from someone

What kind of bike did you buy?

It was a used bike for $400 but I already had $30 in cash so I just got $370.

Originally posted by: jdobratz
Does your checking account maybe have some sort of minimum balance rules, or possibly a hold of some sort on funds in your account? Those are the only reasons I could see that they would return a draft as NSF when you had the funds in the account to clear it.

The only transactions for the past 2 weeks have been to a couple of restaurants and Wal-Mart when I paid with my check card. Also as far as I know there's no minimum balance on my checking account, only a $5 min on my savings.

 

[alkemyst]

Originally posted by: LS20
if you have overdraft "protection" they give him the money and you get fee assessed and neg balance

its not so much protection if it allows you to bounce ...

Many people have overdraft protection now, they still fee you for dipping into it many times.

What I think is BS though is using the largest check first method when you are covered through the overdraft protection regardless.

Banks like to say it's so your mortgage doesn't bounce, but I firmly believe its really about revenue generation.

 

[dmcowen674]

Originally posted by: alkemyst

Most US banks use a "biggest check first" posting order, by which items posting to a customer's account post according to the amount of the item, as opposed to the transaction date.

The "Biggest Check First" policy is common among large U.S. banks, such as Bank of America, JP Morgan Chase, Citibank, Wells Fargo and Wachovia.

Banks argue that this is done to prevent a customer's most important transactions (such as a rent or mortgage check, or utility payment) from being returned unpaid.

This also has the effect of maximizing fee income since the larger items deplete the account balance causing multiple overdrafts by smaller items that present on the same day.

Consumers have attempted to litigate to prevent this practice, arguing that banks use "Biggest Check First" to manipulate the order of transactions to artificially trigger more overdraft fees to collect.

====================================================
Banks like to say it's so your mortgage doesn't bounce, but I firmly believe its really about revenue generation.

But according to the Corporate Apologists on here they swear this is nothing new and they support the pillage and rape by the banks.

 

[Big Fat Fish]

I hate banks. You are a slave to them from 18 until death.

 

[Linflas]

Originally posted by: dmcowen674

Originally posted by: alkemyst

Most US banks use a "biggest check first" posting order, by which items posting to a customer's account post according to the amount of the item, as opposed to the transaction date.

The "Biggest Check First" policy is common among large U.S. banks, such as Bank of America, JP Morgan Chase, Citibank, Wells Fargo and Wachovia.

Banks argue that this is done to prevent a customer's most important transactions (such as a rent or mortgage check, or utility payment) from being returned unpaid.

This also has the effect of maximizing fee income since the larger items deplete the account balance causing multiple overdrafts by smaller items that present on the same day.

Consumers have attempted to litigate to prevent this practice, arguing that banks use "Biggest Check First" to manipulate the order of transactions to artificially trigger more overdraft fees to collect.

====================================================
Banks like to say it's so your mortgage doesn't bounce, but I firmly believe its really about revenue generation.

But according to the Corporate Apologists on here they swear this is nothing new and they support the pillage and rape by the banks.

Are you foaming at the mouth when you spew hyperbole like this? :roll: BTW I think the rule is you rape, then you pillage, and then finish up with some good plundering.

 

[manlymatt83]

What's an overdraft fee?

(uses banks that don't charge them)

 

[Azndude51]

Originally posted by: mjuszczak
What's an overdraft fee?

(uses banks that don't charge them)

When you write a check for more money than you have in your account they charge you.