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| *Loan,banking and credit>>>bank account |
Why do some banks intentionally let people overdraw their checking account with a debit card? |
My bank claims they will not approve the transaction over your account balance and any overdraft protection that you may have. I just can not see why people get overdrawn that just use debit card and write no checks. At the time of the transaction, there may still be money in the account. Not all $ is deducted immediately as the card is used. Say on Friday there is $100 in the account, but $90 of purchases has not yet posted. You don't actually have $100 you have $10, but make a purchase of $50. Bank approves based on the $100 in account. So now you are overdrawn by $40 and whatever fees are assessed. And it does not matter at some banks whether you use debit or credit. For example - I have National City Bank. When i use my card at Wal-Mart the money is taken out immediately (either debit or credit). But if I go to Sheetz and get gas, and use either debit or credit - it takes up to 4 business days. Banks typically will allow a charge to go through that brings your account balance slightly below zero. This is done as a convenience to you to prevent an embarrassing situation. They also conveniently charge you an overdraft fee for each transaction that causes your balance to drop further. I believe it is for the overdraft fees. To be able to charge an overdraft fee, free money to them! Overdraft fees are big money makers for the bank. Some people don't like it when the bank allows them to overdraft on their debit cards, but some people would rather pay the overdraft fee than to have to deal with a "bounced" transaction. Because even just using your debit card can cause problems. Suppose you use your card at the gas station. They do not approve a specific amount, just that there ism oney in there. You put in $20 worth of gas. It may not go through to your account for two days, depending on when the gas station processes the transaction. If you then hit the ATM and it lets you withdraw what will later be pulled for the gas, you get and overdraw fee. Thats just one example. Anytime you use your debit card and choose credit, you take this risk. When you choose debit, the amount is immediately withdrawn. When you choose credit, it is treated like a credit card and not pulled till all the credit reciepts are processed. This can take up to 3-4 days, depending on the store. they let them because the make money off it just like if you were to write a bad check |
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