We were talking about the hidden dangers of debit cards. Here’s another: out of order transactions. This is how this works: your account is not debited in the order you charge or deposit amounts. Instead a bank will process your biggest debit first, then if you’re out of money you’ll get charged a fee for every debit you make after. If they took out the smaller amounts that you charged first, you’d only get a fee for the last charge.
So now a bank can charge you 4 overdraft fees – and they add up fast. Chase Bank decided to stop doing this and hopefully other banks will too.
What should you do? First, check to see how your bank processes debit overdrafts. Change banks if you need to.
If needed, consider a payday loan. A payday loan is more cost-effective than risking fees on your debit card. If you’re cutting it close, put a cushion there. Payday loans are more reasonable than debit card fees if you pay the loan back in the agreed-upon time (2 weeks usually).
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