overdraft

 My nephew had $80 in his checking account.
He deposited another $150.

Then he wrote checks totaling $60.
He got overdraft notices for those checks.

He didn't understand.  Neither did his mother.  She went to the bank
with him.  The teller said they'd let it go this time, but next time he
would have to pay because it's bank policy.  He and his mother still
don't understand.

What's the bank doing?

 

Was the $80 marked as "available funds"?  You see, once you put
a check in, it takes a while for it to get through the banking
system, back to the bank where it was written, and confirmed that
it is indeed a good check. If he put the $80 in as a check, then
the next day wrote a $60 check, it very well could bounce.

BOth your nephew and his mum need to ask about the available
balance, not the gross balance.

-john-

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John A. Weeks III           612-720-2854            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com  
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in addition to the above excellent advice...

It might be worth it to _remove_ overdraft protection from the account.
Note that debit card transactions can generate overdrafts too; even
those made from an ATM.  

Here <http://consumerist.com/search/overdraft/>  is a great deal of
information about overdrafts.   Consumerist does not like overdraft
protection.  Read the links to understand why.

Your nephew is lucky to have learned the lesson so cheaply; it could
have cost him hundreds of dollars!

.max

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 max wrote:

I don't see anything at the cosumerist link that says overdraft
protection is bad.  What's wrong with it?

 

read the material.

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