Biggest bank scam

A recent accounting error resulted in my checking account being overdrawn by $250 and me being charged $298 in overdraft fees as a result. Here’s why.

Large to Small Transaction Processing

Many banks these days, in an effort to extract as much money as humanly possible from their customers, have begun processing checking account transactions in order of largest to smallest. This is why I ended up being charged $298 in overdraft fees for my account being short by a mere $0.35!

In my case, several transactions cleared on the “big fee day” as I refer to it now. At the time I had about $1500 in that particular account. The largest transaction to clear that day was a check I wrote of $1,400. There were 8 other transactions to go through that day, the total of all of these adding up to $350. One of these transactions was a car payment of about $300; the remaining $50 in transactions were small purchases like a pack of gum, a Starbucks stop, etc.

So, had my bank processed my transactions in order of smallest to largest, the $350 in smaller transactions would have cleared just fine and I would have only been popped with one overdraft charge. Instead, they cleared the $1,400 check first, then the $300 car payment overdrew my account, resulting in the first $35 charge, followed immediately thereafter by 6 more small transactions and six more overdraft charges of $35 each!

Just because of the way the bank chose to process my transactions I paid seven overdraft charges totaling $245. Had the bank processed the transactions in the reverse order, the first seven transactions would have cleared just fine, with the $1,400 check being the only personal loan.

So, $245 vs. $35 just because of the way the bank chooses to process transactions? That’s a scam if I ever heard one. And don’t think the bank has any excuse for this either…trust me, I asked.

Excuse #1

When I called to object to such a ridiculous system I was told that the bank did a study and the customers prefer to have transactions processed from largest to smallest. When I asked why or for any information at all about that study, the customer service rep didn’t have an answer, neither did her supervisor, and apparently nobody does because they told me they’d have someone to call and follow up with me…no one ever called.

Excuse #2

When I pushed a bit more, I was told that processing transactions from largest to smallest ensures that the important bills get paid…the bank is assuming your most important bills are probably the largest. Ok, fair answer at first glance, but wait…every single one of my transactions were paid, including the $1,400 check that overdrew my account. When I brought this up, the supervisor said, “well, sometimes they won’t all get paid.” When pushed, she had no real answer to when those “sometimes” were.

Excuse #3

After about 20 minutes on the phone and a handful of questions but no answers, I requested that the order of my transaction processing be changed. No can do, I was told, apparently the bank does not have the ability to change the order of the transactions.

So It All Boils Down to This…

Ok, so let’s make sure I’m clear on this.

  1. Transactions are processed in a way that will always result in the most fees for the bank.
  2. Someone, at one point in time, studied some customers and found that they wanted their transactions processed from largest to smallest, but the actual location or means by which someone can get a copy of this study is completely unknown.
  3. The bank processes transactions from largest to smallest to ensure that the largest, and presumably, most important payments actually clear, but all transactions cleared so that doesn’t make any sense.
  4. The bank is incapable of changing the order of transaction processing for its customers and they have no idea why that is.

Ok, I think I’ve got it now. By the way, the bank was Fifth Third.…

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Debt consolidation calculators debt free calculator

This calculator will show you how much money you can save and how quickly you can be debt free using the “rollover” method. The “rollover” method of becoming debt free consists of putting all available funds toward one debt until it is paid off. After the first debt is paid, you put all available funds toward the second debt until it is paid off, and so on. The process continues until all of your debts are paid off.

The Debt Free Calculator will show you how powerful focused effort can be toward eliminating your debts. By focusing all your resources on one debt at a time, you can save enormous amounts of time and money and become debt free much faster than you would otherwise. Check out our article on the rollover method of debt reduction to learn about the inner workings of the Debt Free Calculator.

Debt Free Calculator Instructions

  1. Enter the balance, interest rate, and minimum payments of up to 10 separate debts in the fields provided. Do not fill in the columns labeled “Interest Cost” and “# Payments Remaining” as those will be calculated for you.
  2. Next, fill in the “Discretionary Income” field. Include in this field any extra money you have available per month, over and above your minimum payments, that you can pay toward your debts.
  3. Once you’ve filled in the balance, interest rate, minimum payment for your debts, and your discretionary income, press the Go! button to get your results.

How to Read Your Results

  • Your summary results are displayed in the bottom section of the form entitled, “Current Debt Plan Vs Accelerated Debt Plan.”
  • The first row labeled, Current Totals displays your summary results making minimum payments on your debts.
  • The second row labeled, Accel. Totals displays your summary results under the accelerated debt free plan. If you aren’t familiar with how the Accelerated Debt Free Plan works, check out this article for a brief tutorial.
  • Balance – This is the total amount of your debts and will be the same under both repayment plans.
  • Interest as % of Balance – represents the percentage of money borrowed that is paid in interest. For example, if your outstanding debts total $150,000 and, over the course of repayment, you pay $150,000 in interest, “Interest as % of Balance” would be 100% because the amount of interest you will pay is equal to the amount borrowed.
  • Monthly Payment – is the total of your monthly debt payments. The Accel. Totals monthly payment will be greater if you included discretionary income from Step 2 above.
  • Interest Cost – This is the total amount of interest you will pay over the life of your debts and most people think it’s surprisingly high, but trust us, it is 100% correct.
  • # Payments Remaining – This is the total number of payments, or months, you have left to pay on your debts.
  • The very last row, labeled, “Time and interest savings with accelerated debt payoff plan” shows you how much time and interest you will save by using the Accelerated Debt Payoff Plan as opposed to making minimum payments.

The Last Two Calculator Buttons

You’ll notice there are two more buttons at the bottom of the Debt Free Calculator labeled, “View Monthly Pymt Schedule,” and “View Yearly Pymt Schedule.” These two buttons will show you amortization schedules for the Accelerated Debt Payoff plan so you can see how your payments, balances, and interest costs are affected by the plan. The two buttons allow you to chose to view the amortizations schedules by month or by year.

Javascript Required

Last, but not least, you must have Javascript enabled on your web browser in order to properly utilize the Debt Free Calculator as it is. Don’t worry, the vast majority of internet users already have Javascript enabled, but if you find that the Debt Free Calculator isn’t quite working as expected, you’ll want to check your Javascript settings on your web browser. Here’s a quick how-to on how to check Javascript settings on most web browsers.…

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Debt free with debt rollover

The average American has over $8,0001 in credit card debt alone; add to that car payments, mortgages, and whatever else you can charge these days, and becoming debt free on the average American salary of around $48,0002 seems like an impossible task. Most Americans are looking at the possibility of never getting out of debt unless they do something different. So here’s a method you may or may not know anything about that can save the average American at least $75,000 and almost 8 years in debt payments.3

Debt Free with Debt Rollover

While you probably know more than a few people looking to pay off mountains of debt, you may also know more than a few people that never actually get out of debt, or really make any progress at all toward getting out of debt. We live in a society that is absolutely ruled by debt. According to the National Center of Education Statistics, 10 years after graduation, college-educated workers are still struggling with debt loads of 4.5% of their incomes. With all this in mind, whole that debt can create in your life can seem bottomless. Well, we’ve release our Debt Free Calculator to show you how you can put your debt into perspective and be debt free at least 30% faster than you originally thought; and that’s if you make just the minimum payments.

What Is Debt Rollover and How Does It Save Money?

Ok, so the real question is, how does it work? Well, its a simple strategy and its nothing new, but with our Debt Free Calculator, we hope you can see a light at the end of the tunnel. The key to the Debt Rollover Method is making a plan and sticking to it. Obviously no amount of planning can help if you don’t see it through to the end. That’s why our Debt Rollover calculator allows you to create an amortization schedule that will show you exactly where your money is going each month.

The method is simple. You make at least the minimum payments on all your debts until the first one is paid off. After that, you rollover the money you were paying no that first debt into the next debt to knock it out even faster. Once that’s paid off, you rollover the amount you were paying each month on the debts that are now paid off to the next debt, and so on. The effect is amazing and really snowballs, especially if you have a lot of debt. This is one method where, the more debt you have, the more benefit you’ll see.

An Example

Let’s say you’re an average American with $8,000 in credit card debt and an average loan amount of $222,700, and your monthly minimum credit card payments are $240 and your mortgage costs you another $1,403 per month. During the first stage you make those minimum payments until, in month 41, you pay off your credit card(s). At that point, you no longer have the minimum credit card payments of $240 per month, so, instead of spending an extra $240 per month on frivolities, you rollover that $240 per month into your next debt, in this case that would be your mortgage payment. Now, instead of making your minimum mortgage payment of $1,403 per month, you pay $1,403 + $240, or $1,643 per month. Using these numbers, and the debt rollover method, you’ll save almost 8 years and 30%. Now, throw in a little extra income toward those debts each month and you’re really going to see some incredible savings.

Are Extra Payments Required?

No, extra payments are not required for this method to save you, on average, 30%, but as anyone with a credit card knows, the more money you can pay each month the better off you’re going to be, so the Debt Free Calculator has the option of factoring in any extra money you have each month that you can put toward paying down your debts. It’s not required, but it certainly helps.…

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