One Way The Banking System is Screwing Us

I have a hate relationship with banks. Maybe in the very beginning I had a small amount of love for them but as the years have rolled by I have grown to hate them with every fiber of my being. I'm not going to say that all my financial issues rest solely in the bank's hands because I have over extended a few times in my life. We all have. The problem I have with the banking system is that they love to slap you with fees for doing their job. Overdraft fees are the biggest load of crap around. And most banks set you up to fail by not offering the option of how the transactions are processed. Let's do a little math here:

Let's say I run a little close before payday to the tune of $11.37. If the bank's overdraft fee is $30.00 and the $11.37 is for one transaction then you will be overdrawn a total of $41.37.

Fine, I ran it a little close and now I have to pay a fee for my carelessness. I mean it's not the bank's fault that I over extended. However, if that $11.37 represents multiple transactions then you are screwed. Most banks like to post your largest transaction first. Actually there are a few banks that give the option of posting the smallest first when you first set up your account but these banks are the exception. So here's how that scenario works:

Let's say that you have $102.25 in your account and four transactions are set to go through that total $113.62. If those individual transactions are $100.00, $4.63, $3.22, and $3.52 and your bank posts largest transactions first, then you're total overdraft will be $99.12 because of three overdraft fees of $30.00 a piece. If the bank ran the transactions from smallest to largest then the total overdraft would be $39.12. That's a $60 swing.

There is still another scenario where the bank would run the transactions in the order they were actually made. This one can go all over the place to the good or the bad. Ultimately it does come down to person financial responsibility. But we,re talking about a system that continues to keep people in this cycle of financial distress for their own gain. Those huge overdraft fees (the national average is $27.00) add up and cause the customer to use money earmarked for other expenditures to pay these fees and sets the customer up for future overdrafts.

This is just the tip of the iceberg for bank fees. Don't get me started on banks that charge a monthly fee to hold money that they are loaning to other people and making huge amounts of money on the interest. All I'm saying is that these fees are getting outrageous and the average person can't keep up with the bank's greed. So what can we do? Here's what one guy did: