this post was submitted on 23 Oct 2023
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That last sentence has been the only thing going through my head as I read this post/comments.
I haven't had an overdraft in like... Idk over a decade. As much as the banks suck for doing this, it's really easily avoidable with a CC.
Then again I know some people who cannot use CCs cuz they can't control their spending and will literally impulse buy themselves into debt.
But it’s not that easy. I also have not had an overdraft fee in decades, because I am financially stable and can afford it. However I also remember more desperate times when I paid so much in fees and still don’t think there was a better approach.
Credit unions generally have lower fees but they still have some, and many require a good credit score to join. Works for me, now.
Some banks/credit unions now let you chose to have a transaction you couldn’t afford rejected rather than charge a fee. It’s a crime that this wasn’t always the case
Some banks now process checks in the order received, rather than an order which maximizes the number of fees they can charge, should some of them overdraft. It is also a crime that this wasn’t always the case
It comes down to being avoidable if you have money and self control.
For some in cases where money is tight, a random charge can wreck a budget and have major knock-on effects.
In other cases, people may not have the knowledge or self-control to operate in a system where you can spend money you don't have. Worse, the current banking system doesn't really let you know if there is a problem until it already exists because solving problems before they happen doesn't make money.
Considering just how little most people have in reserves (in my country the average is something like €500, which is fking ridicukous IMHO), all it might take is, say, your electricity company to make a mistake on a direct debit and all of a sudden there might be hundreds of euros there less than what you expected.
(Sure, they'll refund you the excess money they took ... eventually ... but they won't refund you for any problems resulting from their "mistake", so you're SOLO on that).
Worse, in my own experience in the only time I had one of those (I had moved to another country, was verbally confirmed by the bank when I openned my account that such payments would bounce and yet one didn't bounce and I got charged "unarranged overdraft" fees), even if you have another account with the banks (such as a savings account) with about 1000x what was needed to cover that amount, they won't use any of that money and instead treat it as an overdraft and charge you for it a lot if unarranged.
PS: I ditched that bank within a week, so the £20 or whatever they made from that little stunt was a lot less than they lost, because a lot of money went through my bank accounts (some staying there for long periods until invested) in the years after that.