Comment on Open Thread, December 2-8, 2013

Fri, 06 Dec 2013 06:01:11 GMT

Chase doens't even call their service for debit cards "overdraft protection," so this doesn't support the original point about words misleading people

In the spirit of being helpful and trying to be as factually accurate as possible, I have edited my original post, as you are absolutely are correct about the terminology. I would only argue that I consider my original point to be merely a segway to introduce my main argument that debit card overdraft services are typically poor decisions.

Also, it seems that if you have debit card coverage and overdraft protection, you'll at most be changed $10/day for overdrawing with your debit card.

I do not believe this is accurate.

However assume it is accurate, if you weigh the cost/benefit (again talking about debit card use) it IMO is still a terrible investment. My bank happens to be Wells Fargo and they charge $12, for debit OD service, better, but still pretty bad. But ultimately you must decide what is an acceptable fee. The vast majority of people getting dinged for debit card overdrafts, are not buying life saving medication, its more likely to be a cup of coffee or a hot dog. So if you asked them what they would have done if they knew they had insufficient funds, they would likely reject the $10 or $34 fee. This isn't even considering that most banks are not obligated to tell you that you are overdrawn, so you could get dinged $10 a day until you finally realize it, as opposed to being notified right away from being declined. BTW since you're a Chase customer Chase happens to waive the fee if you can fund your account by day end, but they aren't obligated to inform you that you are negative.

you're better off using your credit card

You're better off using your credit card and saying no to debit card overdraft service – for the most part. Unless you frequently find yourself in the position of having your purchases must go though for what ever reason.

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