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Electronic banking - Jason Lindquist
Idle ramblings of an idle mind
jlindquist
jlindquist
Electronic banking
There was a diary yesterday on DailyKos that goes over a whole bunch of things about credit cards, written by someone who's worked a lot in the customer service end of the credit card industry. One of her points is one I've followed for years, and I can't emphasize it enough:
If the bank makes an error, it’s never in your favor.  So don’t do any sort of direct authorization to your checking account.  For example, you might give your checking account number and routing number so that the minimum payment will be charged every month.  Not a good idea.  Errors can happen.  I have seen many times where the bank has charged the members account for the total credit card balance instead of the minimum balance.  This causes the members checking accounts to become overdrawn.  The bank may be required to reimburse you for their own credit card fees.  But it is completely up to the credit card company if they pay your banks fees (overdraft fees, fees to the store you wrote the check to etc.)  Don't risk it.  Your best bet here: Use your personal banking account and sign up with your bank to pay bills online.
(Emphasis mine.)

Remember the universal truth of banking (courtesy of Leo Getz): They fuck you at the bank!. If you make a mistake, you'll be the one to pay for it. If your bank makes a mistake, you'll be the one to pay for it. I've heard plenty of stories over the years about automatic debits being screwed up. When they fail, they tend to fail en masse--if your power company over-debits your checking account, they've probably done it to lots of other people too. They do not want to be paying everyone's NSF fees, they will try to pay as few as possible. And your bank won't care, they didn't make the mistake. So don't let your creditors pull money from your bank accounts. The best choice is for you to push money from your accounts. Sign up for your bank's online bill payment system, and you control when and how much each creditor gets paid. Personally, my mortgage and homeowner's association payments are set to push automatically just before the first of the month. Everyone else gets paid manually, and I've had no problems, ever.

If you're still writing paper checks, give it up. What used to take me 30 minutes or more of filling out, signing, tearing, stuffing, and sealing, plus a trip to the curb or the post office. Now, it's all done in less than 5 minutes. I now go through stamps at a snail's pace. Checks take days to arrive and be processed. If checks get lost or misprocessed by your creditor's processing house, they're going to try to make it your problem. Electronic payments are often overnight, and they cut your creditors' costs by not making them pay someone to open and examine your check, so they'll raise your rates a little more slowly. If an electronic "push" payment gets screwed up, you have recourse. You can always take your business to another bank if yours screws you over on it. Good luck finding another power or gas company. (Or have fun spending money refinancing your mortgage, if you wanted to move that.)
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Comments
linmayu From: linmayu Date: June 27th, 2008 08:07 pm (UTC) (Link)
Remember the universal truth of banking (courtesy of Leo Getz): They fuck you at the bank!

So true. I learned that when I was doing customer service at a bank. I had at least one customer complain about overdraft fees in this manner: "I mean, $33 overdraft fee for a $3 charge? That's just shoving it up your ass. Or my ass, I suppose."
tambreet From: tambreet Date: June 28th, 2008 03:22 pm (UTC) (Link)
No kidding. Ask my brother about this. His overdraft and NSF charges for the past month? $360. In a typical month, they're about half that.

No, my brother is not exactly the most fiscally responsible person on the planet.
tambreet From: tambreet Date: June 28th, 2008 03:18 pm (UTC) (Link)
I couldn't agree more. And the online banking is so easy, it takes me maybe 15 minutes a month to pay all my bills.

This approach is why I also use only credit cards and refuse to have debit cards on my checking account. If the card or number get stolen, I like knowing I always have the option to not pay with a credit card, rather than having to fight/argue for my money back with a debit card.
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