Denis
“Dear Steve,
I am currently incurring $150 worth of bank charges every month, due to unpaid direct debits and going over my overdraft limit. I have phoned the bank and asked for their help, but they say their unable to do anything. My debts are now starting to snowball.
Is there anything that the banks are obliged to do to help stop me going further in to debt?
Dennis”
Dear Dennis,
The bank is in business to make money and it sounds like your situation is making them extra dollars. Unfortunately this situation exists becuase you are overdrawn on your account and you’ve used up your line of credit in your overdraft account as well. Using an overdraft line of credit on a regular basis can be hugely expensive and a costly way to borrow.
Ultimately the only way out of this situation is to pay off your overdraft balance and make sure that more is not coming out of your account than you are putting in.
One option would be to terminate all direct debits and pay for bills with a check or cash until this situation gets better under control. You might also want to close your account and move to another bank and start over again and avoid giving anyone your direct debit information. Of course that will not change your obligation to repay all the money owed to the first bank.
You could always contact the state banking commission in your state to see if there are any local rules or practices that might limit the amount of bank charges you can get hit with.
Bank overdraft fees are becoming absolutely ridiculous. On my site, we get 4-5 people a day complaining about being unfairly charged. Bank of America has just agreed to now charges up to 10 overdraft fees per day at $39 a pop. Considering how they re-order transactions to optimize their fees, this is going to seriously hurt even more customers. Its time to stand up against these policies and demand change.
Hi Steve,
Another good route to take would be joining a credit union! Unlike banks, credit unions are locally owned – members’ money stays local, and gets reinvested in the local community. They also pass on profits to their members, in the form of lower rates and fewer charges.
Credit unions have never asked for – or needed – a bailout and are not part of the current economic problem. Also, as not-for-profit cooperatives with their member-owners’ interests in mind, credit unions hold on to mortgage loans instead of selling them to a secondary market for a quick dollar. Credit unions have always adhered to conservative lending practices, not the risky loan programs and subprime mess that everyone had heard so much about.
Many people don’t realize that the credit union deposits are federally insured to at least $250,000 by the NCUA (National Credit Union Association) just like the FDIC for banks.
I hope you will keep telling your readers these great points!
Thanks,
Kevin in Denver