Ask Andy: Batching could hit consumers with overdraft fees - Action News 5 - Memphis, Tennessee

By Andy Wise - bio | email

MEMPHIS, TN (WMC-TV) - Batching, or debit card charges sent all in one batch, could hit even the most careful consumers with overdraft fees if they are not careful.

Britt Scearse of Emery Federal Credit Union had advice for consumers every time they swipe their credit card, especially when buying gas.

"Many of the gas stations will only hold one dollar as a hold," said Scearse.  "If you're going and checking your balance at the ATM machine, your available balance is only going to show the one dollar's been held."

Scearse said he hears horror stories every day from his clients who end up overdrawn.

"Evidently this retailer was putting a $75 hold on every single account, regardless of how much money you had or how much money you were actually purchasing," Scearse said.

The consumer spent maybe $20 in gas, but the hold can last three days.

"The challenge there is now there's a $75 hold on their account," said Scearse.  "Even though the actual amount comes out, that hold can still be there for three days."

Scearse said all consumers need to keep a solid check register and have a spending plan.

"A lot of large banking institutions will charge you $38 for every single one, plus $10 a day that you're not getting it corrected," he said.  "And that can add up to a lot of money."

Consumers should document and know exactly what they have spend as they spend it.

"If they forget which days those are coming out and they're out there charging Starbucks, some people like to call them 'five bucks', they're racking those up and they forget that this $80 payment is coming up," said Scearse.

When paying for rental cars or hotels, always use a regular credit card and not a debit card.  Hotels typically put a $400-500 on debit cards.

"That could be a real problem if you're using your actual debit card with your checking account," said Scearse, "because if you only had $500 in the account, you're thinking, spend $200 on the hotel room and $300 to go to dinner and play, well you might not have that money available."

Scearse also said to plan ahead for automatic drafts to your checking account.  He said he had a couple come in for counseling that was spending $350 a month on overdraft fees.

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