I'm really good about keeping track of my spending. I use my transaction register religiously and record every purchase I make, bill I pay, or money deposited into my account. I always know how much money I have. So you can imagine my surprise when I found my account in the red last week, with three overdraft fees added into my transaction history at $35 a pop!
FYI - Banks earn as much as $25 billion to $38 billion annually from overdraft fees.
Each year, I lose about $200 to the bank in overdraft fees. And they all usually hit at the same time due to some unexpected transaction. Last week, I forgot about one of my automatic checks, so I expected at least one overdraft fee. I immediately deposited borrowed money so I could cover the funds and avoid any additional fees. When I looked at my account online on Thursday, it looked fine...exactly what I expected. But on Friday, my account looked different. The bank took the liberty to rearrange my transactions so that the largest amounts were deducted first - to their benefit, of course. So instead of the $35 I expected, I now owe $105 in overdraft fees. (And one of my transactions was for only about $5! Why does the bank make me pay $35 for a $5 transaction????)
I called and complained and got nowhere. So that's when I decided I'd had enough. I decided to fire my bank! I immediately withdrew my money from the bank and deposited it into a credit union account. (Suze is always talking about how great credit unions are, so I finally decided to give one a try.) Within minutes I had a debit card and sample checks. Then I went back to work and signed up for direct deposit right away!
The benefits to signing up with a credit union are endless. First and most importantly of all, the credit union deducts money based upon transaction date and NOT the amount of the purchase. I can almost guarantee my overdraft fee days are over. Other benefits include:
- Early paycheck with direct deposit (Thursday instead of Friday)
- Savings Accounts with no minimum balances
- High-yielding savings accounts and IRAs
- Low-rate loans and credit cards
- Financial Assistance Programs to restore credit and increase credit scores
Basically, unlike the bank, credit unions care about the consumer and want to help people reach financial freedom. They help us save our money instead of finding sneaky ways to steal it from us!
For you banks out there, here's an idea: instead of charging people $35 for each overdraft item, how about don't allow transactions to be made if the money isn't there? I'd rather be embarassed at the store and put items back than have to pay the bank lots of money (money I don't have, by the way) just because they allowed me to purchase something with insufficient funds.
Another idea might be charging one overdraft fee per day - sometimes people do all of their grocery / pet / pharmacy / etc. shopping all in one day, and it hurts to pay an overdraft fee for every single purchase if they happen to unexpectantly spend too much.
During my Seattle trip, I went shopping at Lush - one of my new favorite stores. Lush sells fresh, handmade cosmetics that are mostly in bar form and plastic free! The products seem a little pricey at first, but when you consider the fact that they last for a long time, the cost per use ratio works out really well.
Before making my final purchase, I asked tons of questions, and I found the staff at Lush to be very knowledgeable about their products. They are even willing to give you samples and do in store demonstrations! 
