Avoiding the (Over)Draft

By Timmy Watson in News on Nov 5, 2006 5:28PM

Now that we are at Chicagoist we don't really have money troubles, but we know how ridiculous overdraft fees can be. First of all, unless you are writing checks we still don't really understand how banks let you use more money than you have in your account. As we have seen in some commercial for a bank, you can buy a cup of coffee and magically your Gateway computer shows the charge in your bank account. We would think once the money runs out, it would stop working. Well, evidently that is nonsense.

We know, the blame lies with those that balance the checkbook. But, maybe it doesn't. Until recently, MB Financial would display account balances at ATM's with the overdraft limit included, leading customers to believe they actually had that money. According to the Crain's article the following banks allow overdraft at ATM's and give you no warning: Charter One, Fifth Third, TCF, MidAmerica, Harris, MB Financial, and Washington Mutual. These fees range from $29-$35.

The issue with these fees is that it is contributing to banks' profit, so they may have no reason to fix the broken system. MidAmerica attributed its increase in profits to "higher consumer overdraft activity due in part to allowing overdrafts at ATMs." The reasoning behind why these banks won't implement some type of warning system is that the technology is too expensive and complicated. Maybe by the time the holiday season rolls around we will have given them enough money so that they can afford it.