Note to Bank - You're Fired!

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.

Debt Consolidation Card

Last night,  I watched an old episode of The Suze Orman Show on iTunes (she has free podcasts every week!). It was the "Bank Bullies" episode where she talked about how credit card companies were raising the minimum amounts due on card balances and other things they do to screw people over.

One piece of advice she gave was to do a debt consolidation and transfer all of your credit card debt onto one card. That way, you only have one payment each month with hopefully a lower interest rate. It's just like consolidating student loans, but instead it's credit card debt. Suze said the best way to do this was to go through a credit union because they offer lower interest rates.

So...I called one of the local credit unions today, and the credit union today, and to make a long story short, they couldn't help me. I have about $12,000 in credit card debt on three different cards that I'd like to consolidate. But in order to do so, I have to apply and qualify for a credit card at that amount or higher. QUALIFY? There's no way I'd qualify for that amount, so I stopped the application process and went back to the drawing board.

To me, the whole thing doesn't make sense. All I want to do is take the current debt I have and dump it onto a new card so that I can reduce the number of payment I have each month. Sounds simple right? I kind of understand where the credit union is coming from (they can't guarantee I'll use the credit card to pay off my debt, which is why qualifying is important), but still!

I just want to consolidate my debt, and NOT with one of those debt consolidation services! If anyone out there knows of any good accounts, programs or credit cards I can start to consolidate my credit card debt, please let me know!