Monday, April 16, 2012

Debit Cards are a Scam

Yes, it is time once again to rail against the banks. While I am certainly not an occupier I do share one view with the unwashed urban campers - banks suck.

This is coming from someone who has defended banks (and tobacco, and insurance companies, and etc..) for the simple reason that they do what they do. Do you get angry with lions when they eat zebras? No, that's what lions do. If you are a zebra and do not want to be eaten by a lion DON'T GO WHERE THE LIONS ARE.

Take tobacco. It is a legal product yet when used as directed it will turn your lungs to char before killing you. I do not understand how there can be lawsuits for that (don't flame me on the false research studies - that is fraud and should be prosecuted). Make it illegal and then sue them. Oh wait, the tobacco lobby. But I digress.

Insurance companies are supposed to take risk off the consumer in case they suffer a loss (of property, health, life) in the future.  That is a key word - future. It does not mean taking risk for things that happened in the past. That is a dumb business model and no companies would ever willingly agree to that.

While I do agree there has to be something available for the public good to help the poor deal with serious problems I do not agree that private insurance companies should be forced to do it. Again, think about what they are supposed to do - insure you. Insure means to take future risk from you for money. It does not mean to rescue you from a bad place after the fact.

Again, I am against fraud and insurance companies that hire armies of lawyers to get out of paying proper claims should be punished.

So banks have to squeeze out every last buck because they cannot make their mega bucks anymore. That's what a good bank is supposed to do.  But get this, I do not have to be their customer.

As blog readers know, I dumped Chase last year and moved to a Credit Union. Aside from not having a branch on every corner in every city in America I can detect no difference between them - except for their fees, of course.

It all started when I go my son a debit card to use for his summer on the left coast. The idea was for me to control his spending by only allowing a certain amount of money on his card. When it ran out, the spending stopped (Hey, Mr. O, did you hear that?).

Lo and behold there was an automatic overdraft feature and I was hit with hundreds of dollars of fees. Starbucks coffee was 4 bucks with a $35 dollar tip to Jamie Dimon.  A credit card would have been a better choice but the bank employee did not pick up on that.

Anyway, I took off the overdraft protection and wouldn't you know it? More fees!  Yes, they allowed the balance to dip below zero. What? It's a debit card! Impossible.

They handed me some BS about clearing times blah, blah, blah yet somehow they know how much is being charged at any given second of every day - weekends included. More fees.

So, this year, my son has a Bank of America debit card and we just got hit with an overdraft fee. Mr. Customer, we did not want to leave you with no money when you needed it so we let it go through. We did tell you on the screen."

"Mr. Banker, I do not want overdraft and again the point was to give my kid a budget."

Sorry, Mr. Customer. Here is a bird you can display on your mantle.

Guess what, Mr. Banker. You can keep your bird and gently place it where the sun don't shine. We are outta here.Why don't you go back to that robo-foreclosure thing you were working on.

Dear readers, debit cards are a scam. I wonder how the banks use that same lame argument with gift cards. Go ahead, try to charge me an overdraft fee on that one.


amn624 said...

Had the same experience with my kid and the same conversations with Chase (the Devil incarnate).

FloatingApex said...

I could not understand why the banks with whom I interact kept "pushing" debit cards. Now, because, of your column, I know.
Fortunately, I did not succumb any of the several times that the smiling, quite courteous bank employees were trying to have me sign up for these wonderful debit cards. (Reminded me of when the several times auto salesman would keep trying to get me to lease a car rather than pay cash or get a loan.)

Brendan said...
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