Reply #93: With respect,

[FBaggins]

there's a difference between what "sold" you on getting the card and how/why they were designed. There are lots of features/benefits to such products and some are more attractive to some people than others. If "never be overdrawn" was on the list... it was nowhere near the top.

I've never seen a list of benefits that even included anything like "avoid overdrafts because we won't let you take money you don't have" (and I used to write such training pieces), but I admit that perhaps my bank is different. As I said, they really can't make that promise because they don't know what other transactions can hit your account on the same day. The original ATM cards wouldn't let you withdraw money that you didn't have... but you could still be overdrawn due to a check presented earlier that day that didn't post until midnight... or a gym membership automatic debit that you assume had already posted... but hadn't.

Regardless, we have to agree that almost all such stories boil down to a consumer that doesn't want (or perhaps know how) to keep track of how much money they have. They want a magic talisman that will limit their spending for them... and no bank can provide such. Anyone in such little touch with their finances isn't going to remember the check they wrote a month ago to the Unite Way that just hasn't cleared yet.

The long and short of it is that it smells of "I can't be out of money - I still have checks left" - We can't fix that by passing legislation. If hundreds upon hundreds of dollars in fees can't slap someone into watching every penny... then no call/email/notice legislation is going to fix that. I read an article on this subject who claimed that he figured he had paid between $2,000 and $3000 per year in such fees over the last few years. He too felt a righteous indignation that someone was supposed to stop him before he spent again. Something in him knows that that next movie rental... next beer... next ebay purchase (whatever) was going to cost him much more than the face value... but he couldn't stop himself. No legislator should think that WE can.

My proposed fix (which I now realize was in reply to myself so nobody likely saw it) is to limit overdraft fees to the amount of the item posted. A $5 charge shouldn't cost to $40 in fees. I'll amend that to say maybe we should also limit overdraft fees on overdrafts that are smaller than the amount of overdraft fees charges in the last seven days (or whatever). That way you won't pile up more fees just because you didn't account for fees you didn't yet know had been charged.