<p>My daughter was down to her last $50 in her checking account. She's at college.</p>
<p>She makes 9 transactions using a debit card. The first transaction is larger than $50. She is now overdrawn. The bank pays. She then makes another 8 transactions over two days averaging $15 a transactions. The bank pays. So she ends up around $120 in the hole. She doesn't know this and she should keep better track of her money.</p>
<p>She gets a notice from the bank. They told her they honored her transactions. Didn't want her to have any bounced checks.</p>
<p>Of course, because they did this, there was a fee. $33 a transaction. The fees were larger than the amounts my daughter paid.</p>
<p>The fees were $303 for $175 of purchases.</p>
<p>I called the bank, but they didn't want to talk to me. I told them I wired $1000 into the account and I wanted to discuss the fees. They said because I'm not on the account they won't talk to me. I said, "OK, but before I hang up do you think fees of well over 100% for being overdrawn for 2 days was reasonable?"</p>
<p>The bank said,"No".</p>
<p>My daughter talked to the bank and they cut the fees to $66 from $303. Those fees are still astronomical, percentage wise.</p>
<p>So. Tell your kids to watch their bank balances.
The banks take advantage of college kids. The banks are pigs.</p>
<p>This goes with what latetoschool has posted in the "Home Ownership: Overrated?" thread.</p>
<p>Same thing happened to my son. Not exactly the same but similar. We didn't call at all. We told him to walk into the bank, explain what happened, apologize and ask if they would reduce the fees. He got them reduced to around $25. </p>
<p>It was his fault. He would have saved himself a bunch of grief if he had bothered to open his mail from the bank saying he was overdrawn, but he ignored it. He has learned a valuable lesson and so will your daughter if you let her take responsibility for what happened rather than blaming the bank. Are the fees outrageous? Yes, but that is how banks operate. Play by their rules and you won't have a problem. Kids need to learn THAT lesson.</p>
<p>I have a couple of problems. It would have been cheaper for my daughter if the banks denied the debit card. She could have then gone and borrowed from her friends. </p>
<p>These transactions were small. They were smaller than the fees charged by quite a bit.</p>
<p>The banks were taking advantage of my daughter's ignorance.</p>
<p>$303 in fees for $175 in transactions (And it is really $120. My daughter had the first $55 covered). I think the mafia charges better rates than that.</p>
<p>dstark, just so you know usually banks will waive NSF only the first time she overdraws her account. If there is a next time, the bank will not be so forgiving.</p>
<p>When my S opened his checking account we had them put overdraft protection on it. I had to co-sign so he could have a line of credit but it will help those times when you over draw your account. As long as you don't use it, you won't pay interest, and if you do use it and pay the OD right back the interest is very small.</p>
<p>I read an article about this I think in USA Today. Banks make a lot of money charging these fees and that is why they don't deny your debit card. I guess that banks are hurting because no one writes checks anymore and uses their check cards, hence the high fees.</p>
<p>My kids all have online banking access. They check their balances before leaving their homes/dorms. They think the computer is foolproof. Then they forget to deduct the rent check which is in the mail and the debit which has not yet posted. They think mom's idea of keeping a register is something from the dark ages. And don't get me started on non-system ATMs. Our family bank has ATMs on their campuses.</p>
<p>My kiddos also use B of A and their online banking. It is in real time so they can check to see what exactly their balance is BEFORE they use their debit card. Also all the kiddos checked and B of A has ATM kiosks on all their respective campuses (one of the reasons they went with B of A initially). They are also quite aware that you can ask for cash back at Target, Walmart and other grocery stores without incurring ATM fees if not near a B of A atm teller.</p>
<p>It's their money so if they want to throw it away on bounced fees/over the limit then they can! Not too surprisingly they have all managed to avoid those fees and their credit card over-the-limit fees, and late payment fees. DS figured out quickly the 0% balance transfer rules and helped his sisters out big time.</p>
<p>Kat</p>
<p>also kiddos have managed to link their accounts so if one is short or needs a little help the other sibs make an online transfer, son monitors all their accounts so he knows what they all spend and when....makes his sibs nuts!</p>
<p>Many banks have student accounts that don't charge a fee if overdrawn. Find a bank with lenient student policies or, better yet, let your kid screw up and face the consequences.</p>
<p>I've never understood the need for debit cards. With a credit card, which our kids pay off each month from their checking accounts, and an ATM for cash needs, a debit card seems unnecessary. I'd probably lose track, myself, if I used one. At least the ATM won't give them money that isn't there.</p>
<p>why use a debit card when you can use a credit card - pay it off in full - get better protection than a debit card offers - and collect reward points.</p>
<p>ASAP I thought that an ATM wouldn't give money if there is none in the account but my daughter found out that is not the case.
She withdrew cash from an ATM that was not her own bank on a weekend. It gave her cash. She ended up overdrawn and like Dstark D with a fee. She went in and they did reverse it. If she had gone to her own bank she would not have been able to withdraw cash.</p>
<p>I made sure I was a co-signor on D's checking/savings account so I would have on-line access to the account as well. First thing I check when I come into work is her account balance and activity. If it's getting low, I e/mail her the link/page to make sure she has balanced. I've done this enough times that she pretty much can handle it on her own now. Only overdrew her account once and I was pretty verbal about it.<br>
**It's nice to have access because if she uses her debit card, which she frequently does, I can see where she is spending her money. Like the time she got a tattoo. :)</p>
<p>I have always liked debit cards better than credit cards for my kids because of the interest charges and fees of credit cards. Obviously, I need to rethink that.</p>
<p>I also like the idea of not spending what you don't have so that is in favor of debit cards.</p>
<p>"**It's nice to have access because if she uses her debit card, which she frequently does, I can see where she is spending her money. Like the time she got a tattoo"</p>
<p>Not as bad as a tattoo in my opinion, but I have seen some Victoria Secrets charges. (I really need to learn how to make that shocked face. :))</p>
<p>What ASAP said. Because I read of these fees last year on cc, I never considered a debit card for DS. </p>
<p>He has been trained by us and our role modeling that a credit card is a convenience, not a source of money. You use it so you're not carrying around a ton of cash. You pay it off in full each month. Ergo, no interest payments. If you don't have the money in your bank account, you don't use the credit card. End of story.</p>
<p>He uses his ATM card to get cash and sees his balance every time (he could also look online; don't think he does that too often). If he does use it to buy something, he recently saw/will soon see his balance. So no excuse for an overdraw. Which he has never done. He is also trained not to use his ATM card where there will be a fee. In an emergency, okay. But not for routine spending money. Never too soon to learn these habits, imho.</p>
<p>I hate, hate, hate the fact that credit cards will be denied if you are over limit, but the debit cards will not; then they charge those usurious fees. Nice cash cow for them.</p>
<p>dstark - lesson of the day: : eek : (no spaces) = :eek:</p>
<p>At my D's bank they will deny access to your debit card if the funds are not in the account. I do like that feature and she does not have a credit card. This happened when she went to buy a drum, I mean, a cup of coffee. :D</p>
<p>My daughter's account allowed us to put an overdraft protection to my account. I figured it could potentially save a lot of money for her(us) until she gets the hang of balancing her account, etc. So far (since last June) she has overdrawn once. I gave her grief and she is checking her balance online now. I doubt if she actually keeps a register though. Maybe I'll work on that with her this summer LOL
I remember when I went to college I wrote a deposit down twice accidently and then of course overdrew my account. That was actually why I set up the overdraw protection - I remembered how scary that bill was!!
Hopefully the next couple of years will be a learning cureve for her and when she graduates she will be fully capable of managing her finances. Until then - I'll be a little bit of a nag. LOL</p>
<p>My kid does not keep a register. I showed him how to use one last summer. I asked him a month ago if he was using using it. He asked me what a register was and I reminded him. He said that with online banking he does not need a register. He does seem to know his balance. He is using a debit card for day to day cash. I told him to use his credit card for emergencies, and I did ask him to charge his books on his credit card for his second semester. We had him pay that off right away.</p>
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I doubt if she actually keeps a register though. Maybe I'll work on that with her this summer LOL
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I think the register is now a dinosaur? Actually, I think check-writing is, too. DS has written one check that I know of; it was a "life-lesson" bill he had to pay and we made him sit down and write the check to <em>feel the pain.</em></p>
<p>Like your kids, he doesn't see the point of a register - "don't I see the balance when I go to the ATM?" I think that's how it will be for them. And checking online to see that all transactions are valid. Using the account alerts feature is great, too, because it will flag unusual activity. I think that's the banking-system-of-the-future which, I guess, is here now.</p>
<p>DH and I rarely write checks anymore ourselves. We do balance accounts in Quicken. Easier and more fun than the old-fashioned way.</p>