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Dave Kennett
Dave Kennett, Attorney
Category: Business Law
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Experience:  25 years practicing law
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Recently my bank has changed how they process credit card withdrawls

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Recently my bank has changed how they process credit card withdrawls from a checking account. Example: On a weekend I purchase items at three stores using a debit/credit card. When I get home I transfer money from my savings to cover what will be presented on Monday to Wednesday to my credit union for the charges I made that weekend. Even though no company has made a demand for payment, I covered all charges before the demand for payment was submitted, my credit union is instantly charging me an overdraft fee based on the instant the charge was made. So what I guess I am asking is how can fees be charged for overdraft when my account was never over drafted based on when my credit union is presented a demand for payment and is there any way for me to challenge this practice? Next: Deposits. Can they withhold electronic transfers for deposits for hours from other banking institutions? If it is instant for withdraws why not for deposits?
Submitted: 7 years ago.
Category: Business Law
Expert:  Dave Kennett replied 7 years ago.
<p>Dear XXXXXser1 - I'm not sure if this is a debit or a credit card. If it is a credit card then there should be no overdraft fees so I will assume it is a debit card. Whenever a debit card is used as opposed to a credit card the transaction is instant and your account is debited whether it actually shows on account so you are technically overdrawn. This is similar to when everyone used checks and they didn't clear the bank for several days however that was before electronic transfers so, even though it was considered check kiting, no one actually did anything because it didn't register until the check clear the bank.</p><p> </p><p>Those days are now gone with electronics and the banks will charge for any overdrafts, technical or otherwise. Many times deposits, if they are checks, are held for a couple of days before the funds are released which complicates the matter even more. The best way to solve this is to transfer the money into your account before the weekend to avoid this problem. </p><p> </p><p>I'm not sure what you mean by "no company making any demand" since the transactions are electronic and there is no actual demand made by the merchants for the money and it certainly would not take until Wednesday for the transaction to clear. In any event, the bank has its rules regarding deposits and withdrawals and they have plenty of lawyers to fight their battles. </p><p> </p><p>Deposits typically take longer to clear than the charges so it is important to keep sufficient funds in your account in order to cover any purchases you make. You can argue with a bank all day long but in the end they will operate under their rules and charge all they can with these ridiculous overdraft fees etc. I know it's a racket but neither you nor I have the time or the resources to sue them and win in a case over a few dollars in overdraft fees.</p><p> </p><p>Believe me, I sympathize with your position as I am no fan of banks but I have to offer my opinion based on the law the way it is, not the way I might like it to be.</p><p> </p><p>Dave Kennett</p>
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