Via: MSNBC
Would you pay $38 for a cup of coffee? Clifford Phillips of Spokane, Wash., did. He used his debit card to pay for a latte, not knowing there wasn’t enough money in his checking account to cover it. The bank could have declined the transaction for insufficient funds. Instead it approved the electronic payment and dinged his account with a $34 overdraft fee.
Another instance where I find myself on the fence.
On one hand, you *should* know how much is in your checking account. It’s a part of being a responsible adult, and learning how to budget your available money.
However, being auto-enrolled in a “protection” system that has a $34 overage fee is kind of the opposite of protection in this case.
Then again, if it had been something more important than a cup of coffee… say, the heating or electric bill, I assume he would rather the $34 fee than missing a utility payment. Also, depending on the amount “loaned”, $34 is an obscenely high interest rate.
Thinking about it, I’m all for the program being in place for emergencies as an opt-in program, with a regulated fee as a fair percentage of the over-draft.
Thoughts?
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Totally understand how he feels, and am also on the fence about it. The first time I ever overdrafted, I was like 17 and had rented a movie, which overdrafted me by 4 cents and got charged $20. However, my bank charges a monthly fee for overdraft protection so that they will decline my card if I’m overdrafting, which I sort of feel is something that shouldn’t have a monthly fee to it. Granted, being a responsible adult and knowing how much you have is important, but sometimes your calculations or memory are just a bit off.