Banking today seems to be a much more complicated affair than it was just 10 or 20 years ago. The advent of debit cards, online banking, the ability to link checking and savings accounts, and tons of banks competing actively for your business can be overwhelming for the average customer.
After all, most of us just want a few simple things from our bank: a safe place to keep our money, access to our cash when we need it, and the ability to charge purchases or write checks to pay for things we need in a convenient fashion.
However, banking is big business. And, where there’s money, there’s creativity. Banks are always looking for ways to make themselves more attractive. In the 1980s it was ATMs. In the 1990s, it was free checking. In the current decade, it is overdraft protection programs.
Overdraft protection sounds like a great idea. After all, who doesn’t want to be “protected from their overdrafts?” In fact, protection sounds like just the kind of thing we all should expect from our banks, right?
Still, the reality of overdraft protection is not so simple. It’s true that overdraft protection protects you, the bank customer, from having your debit transaction denied or your check returned. But, this protection comes at a steep price: paying big bank fees.
What makes overdraft protection programs tricky and confusing is that banks can purposefully manipulate the transactions they are processing in order to tip the scales in their own favor. For example, by processing the larger transactions first (and if your balance is already low), the bank’s action could push your balance into negative territory. And this makes room for all of the smaller transactions they process immediately afterward to incur an overdraft fee of $25, $30 or more to your account. This happens each time one hits. Boom. Boom. Boom. “That will be $90, please!” says your bank.
This practice is making banks quite wealthy. In fact, banks make about $26.5 billion per year in overdraft fee charges last year alone. This is a lucrative thing that banks have going and they don’t want to spoil it!
If you have recently checked your bank statement and discovered multiple bank overdrafts there, here are some tips for how to remove bank overdrafts:
1. Start by doing your research: Check your online or paper bank statement and write down all of the facts about the transaction in question. Can you show that there actually was money in the account at the time of the overdraft? If so, you may be able to build a case to convince them to reverse the charge.
2. Call your bank’s phone hotline: Put on your nicest, best phone voice. Remember, this person gets calls like yours every day – or maybe every hour. You will need to be polite, even if he or she shoots down your initial argument. Get them to see the facts. At the very least, get them to see how things appeared to you, the bank customer.
3. Ask them to remove the bank overdraft charge: Your bank values you as a customer. Keep this fact in mind when you are calling to ask them to remove the charge. You have a better chance of getting it remove if you can show that it was your first such charge in a while.
4. Avoid losing your temper: Remember, it will almost never be effective if you lose your temper with your bank rep while trying to negotiate for a fee removal. Still, if you are truly on the verge of leaving your bank due to their craft overdraft fee policy that seems to be draining you every cent you have, maybe showing a bit of irritation could work in your favor. Just remember, though: be ready to back up your bluff if they call it.
If you end up failing to get your bank to remove your overdraft charges, consider switching to a bank that does not charge overdraft fees. You can even find banks that will cover your overdraft without charging a fee.
