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PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 4093
Experience:  Tax professional and business consultant for 35 years.
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My children who are in their 20's have accounts at Wells

Customer Question

my children who are in their 20's have accounts at Wells fargo that I transfer an allowance into to pay for food, sundries and occasional taxis. I pay for their share of the rent, cell phones, utilities, college tuition and health insurance. If they need additional funds for emergencies I pay direct not through their accounts. I have an account at Wells fargo with minimal funds for household and to transfers to their accounts. i have filled out the forms online and at bank stating I do not want overdraft protection nor will pay for it on all the accounts. Their accounts are not co-signed nor attached to mine in any way. The problem I have is that Wells Fargo allows them to overdraft their accounts up to $400 a day. And they charge $35 per single overdraft as well. I give them $250 a month for food which is plenty. i have complained to the bank that it is not correct (legal?) for them to allow overdrafts without permission. Their answers ranged from "Its up to our discretion" to " Its not our job to control your kids spending, its yours" I have asked other mothers and have no solution either. The bank cuts them off from 400 to once $1800 overdraft. That I have to pay before I can give them money to eat. Bank said they do not have a card that excludes overdraft. The pay as you go cards charge a big % fee unless i chose the wrong ones - AMEX and VISA I believe. I need to be able to transfer funds and not allow bank to overdraft as controlling ones children's allowance and teaching them financial responsibility is a parents job. What do you think is my best option? As I may have not heard of what other parents do yet? Thank you as this is the biggest problem I have in my so far good job as a mother.
Submitted: 9 months ago.
Category: Finance
Expert:  PDtax replied 9 months ago.

Hi from Just Answer. I'm PDtax. I have a solution.

Instead of using accounts that do not give you the control you need, how about using prepaid debit cards that they can't overdraft? Use another bank if you like, or one of the many non-bank debit card services. Then they learn to spend within their means, since overdrafts won't be cleared.

The cards I recommend don't charge a big fee. Some are available and can be refilled at Walmart, for example, for very small ($3 or less) refill fees. And there is no bank account to manage or overdrafts to pay.

Your bank finds these accounts are a big profit center by allowing these transactions to clear. Use the direct debit cards, like those available at WalMart, and avoid all these fees (and teach financial management too).

Thanks for asking at Just Answer. Positive feedback is appreciated. I'm PDtax.

Customer: replied 9 months ago.
I find the banks practice to be illegal as i signed a form disallowing them to permit overdrafts. That is a contract. is a contract a legally binding instrument under the law? Or do banks write their own laws governing contracts? or are all contracts up for interpretation? Thought that was one area of the law that was governed by the books and immutable. How third world the law really is. Thanks for your advice! Maybe start a petition against unscrupulous bank practices- mothers unite!
Expert:  PDtax replied 9 months ago.

Taking on your bank to make them comply would not be worth the personal and financial price you will have to pay. Best to take other steps, and manage your banking at lower cost and better control.

Thanks again for using Just Answer. Please rate my assistance using the stars rating scale below to finish your question. I'm PDtax.

Expert:  PDtax replied 9 months ago.

Hi again. PDtax here. Can I ask you to use the star rating system to rate my response to your question to close it out before month end? Thanks.

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