Courtesy Pay or Overdraft for debit or ATM cards.

If you have no money in your account and you pay for a purchase with a debit card, what do you want your Bank or Credit Union to do?

1.) Decline to pay. That way I won’t spend money I don’t have and pay fees for the privilege.
2.) Pay it and charge me a fee and give me a few days to get the money there. That way I won’t be embarrassed in front of people.

There is a law that says the Bank or Credit Union has to get your permission in writing to do #2. Some financial institutions would charge a large fee, $35 for example, for each transaction. The average fee is $29. So a movie ticket, popcorn at the snack bar, and coffee at the local coffee shop after could cost $105 in fees in addition to the actual costs. Or an ATM withdrawal could cost a lot more than the fee the ATM owner and your financial institution charge. Some financial institutions also charge another fee for every day your account balance remains negative.

Most accounts have a limit (say $200) that the financial institution will let you overdraft. Some of the financial institutions would add your allowable overdraft amount to the amount they reported as your “available balance” when you checked the ATM. Trying to fool you into thinking that you had more money in your account than you actually had. And encouraging you to rack up those fees.

Decide whether you want “courtesy pay” on your debit card before you open the checking account. Decide if you want “courtesy pay” on checks you write, which is a separate decision. Don’t sign up for anything you don’t want, no matter how persuasive the representative is.

This post applies equally to banks and credit unions.

“Courtesy.” I do not think that word means what you think it means.

1st United Services Credit Union

1st United Services Credit Union is very focused on the East Bay. They have the most branch offices (eleven) in Alameda and Contra Costa County of any C. U. in Oakland, and don’t need to use C.U. shared branching. List here includes their ATMs. The Co-op ATM network is also available for free. The annual meeting is in Pleasanton at the headquarters, so members may attend easily.

1st United Services Credit Union was one of the first credit unions in the State of California. The credit union was originally founded in 1932 as City & County Employees’ Credit Union to serve Alameda County Employees. 1st United Services C.U. has $788 million in assets, and 47 thousand members.

They make it easy to leave your bank with a Switch Kit (pdf)
To join you must put at least $25 in savings and $25 in checking.

The minimum balance listed for regular savings to earn interest is $100, but as of November 3, 2011, the rate is only 0.05%. Their highest savings rate is 2.02% on a 60-month bump certificate of at least $2000. If they advertise a higher rate on those certificates, you can bump up to the higher rate once during the term.

They have free 1st basic checking. No minimum balance required, no direct deposit required. Checks are $17.50 for 150 checks. Returned/bounced checks cost $25 each.

The member services agent recommended 1st interest checking. For $1000 minimum balance, you get a free box of checks each year and one $25 fee waived per year. The interest paid is 0.05%, so you’d earn at least fifty cents a year on your $1000 minimum balance.

They have a Sharing is caring program. Refer a friend and 1st United will donate $10 to Alameda County Food Bank or Toys for Tots. Sharing is Caring