It's rough being poor! My wife & I live month-to-month and, during the last few days of each month, we rarely have as much as $100 to our name. If a financial emergency arose, we would be in a pickle because we simply wouldn't have the money to cover it. And that potential can be a bit frightening.
Today we unwittingly have found ourselves in a bit of a mini-crisis. We traveled north to Aberdeen to do a little grocery shopping with our dwindling funds. Before leaving to head back south, we stopped at the Safeway gas pump for $10 in fuel. After spending that piddly amount through our credit/debit card, we thought we had left around $60 in our bank account.
However, upon returning home, I used Quicken to get our check register up to date and went online to insure my figuring reconciled with the bank's figures. When I checked our account balance, I was shocked to see NOT a $60 balance but a $17 balance!
Why the discrepancy, you ask? It's seems Safeway deducted $75 from our account to cover $10 in purchased gasoline!!!
This isn't the first time we've encountered this problem. In fact, it seems to be a rather routine business practice these days. We've been encouraged for years to do away with purchases by cash or check and to move to plastic. Now that a significant number of Americans have made the switch, business are changing the rules -- for their benefit, not ours.
I thought I understand this strange practice. I had learned through experience that most gas stations deduct the $75 from one's account when purchasing fuel by pinless debit card. The way around this, I had learned, was to use the debit card like a credit card. This tact has worked at the gas stations around South Bend, but it appears that Safeway does things the other way around.
I don't know about you, but this doesn't seem ethical to me. It's like these businesses are extracting unauthorized loans from us. I buy $10 worth of gas and they take $75 from my account. They use the excess $65 for a day or two and then, when the transaction is finalized, they give the $65 back.
If we were a middle class family with a few hundred dollars in monthly reserves, it might be annoying, but it wouldn't cause a problem. Unfortunately, for families like ours, this unauthorized $65 temporary loan represents about 80% of our available funds. In other words, it creates a B-I-G problem.
If anyone out there can explain to me why this makes good business sense, I'd like to hear it. Please explain to me why a company needs $75 of my money to insure they receive $10 (or $3 as it happened 2 months ago).
I'm all ears.
Today we unwittingly have found ourselves in a bit of a mini-crisis. We traveled north to Aberdeen to do a little grocery shopping with our dwindling funds. Before leaving to head back south, we stopped at the Safeway gas pump for $10 in fuel. After spending that piddly amount through our credit/debit card, we thought we had left around $60 in our bank account.
However, upon returning home, I used Quicken to get our check register up to date and went online to insure my figuring reconciled with the bank's figures. When I checked our account balance, I was shocked to see NOT a $60 balance but a $17 balance!
Why the discrepancy, you ask? It's seems Safeway deducted $75 from our account to cover $10 in purchased gasoline!!!
This isn't the first time we've encountered this problem. In fact, it seems to be a rather routine business practice these days. We've been encouraged for years to do away with purchases by cash or check and to move to plastic. Now that a significant number of Americans have made the switch, business are changing the rules -- for their benefit, not ours.
I thought I understand this strange practice. I had learned through experience that most gas stations deduct the $75 from one's account when purchasing fuel by pinless debit card. The way around this, I had learned, was to use the debit card like a credit card. This tact has worked at the gas stations around South Bend, but it appears that Safeway does things the other way around.
I don't know about you, but this doesn't seem ethical to me. It's like these businesses are extracting unauthorized loans from us. I buy $10 worth of gas and they take $75 from my account. They use the excess $65 for a day or two and then, when the transaction is finalized, they give the $65 back.
If we were a middle class family with a few hundred dollars in monthly reserves, it might be annoying, but it wouldn't cause a problem. Unfortunately, for families like ours, this unauthorized $65 temporary loan represents about 80% of our available funds. In other words, it creates a B-I-G problem.
If anyone out there can explain to me why this makes good business sense, I'd like to hear it. Please explain to me why a company needs $75 of my money to insure they receive $10 (or $3 as it happened 2 months ago).
I'm all ears.
Very irritating practice and our family is like yours........such things can set in motion a chain of events that can get real expensive if your overdraft your account.
ReplyDeleteMy wife got paid today. 10.51 left by the end of the day :) We live day to day fine..........it is the unexpected expenses that tend to burn us.
Bruce
One of the big advantages to online banking is to keep overdrafts to a minimum. Since with most systems transactions are posted in real time, it makes it that much easier to catch things.
ReplyDeleteI think that there are 2 reasons for the push to use plastic. People squander more money on more products easier and in the event of using debit they can accrue a little interest from your money with the extra hold. Cards were never created to benefit people.
ReplyDeleteNot too common here either but it does happen.
ReplyDeleteSome internet companies/restaurants will put through a provisional charge to verify your card. There charges are supposed to come right off. With our Health Savings acct with Fifth Third Bank I have seen these charges take a week or more to come back off.
I know you don't want to use a debit card to rent a car. They often debit the card for 2 times the rental amount. If you don't know that........it is overdraft time.
Internet banking access has saved us more than once. We see we are overdrawn,make a deposit, everything is OK. In the old days (pre-internet banking) it was 3-4 days before you found out you made a .53 error that bounced 4 checks.
Bruce
This happened to me recently before I left on my trip. Because I used a debit card to rent my car, my account was charged an extra $200, until I returned the car. I don't understand the rationale for that, either, although I think it might have something to do with the rental company earning some interest on the money while they hold it for a week. The last university I attended did the same thing with student loan money.
ReplyDeleteugh! i haven't heard this... i am so glad i use only cash. i have a little money in a checking account that, frankly, just sits there. it's about $75 that i had extra one time and just decided that it would be my back up money... so if i ever need it, it's in the bank. however, i cash all my checks and just use the cash! it's a lot simpler. my husband uses checks and cards, but he is dealing with much larger amounts of money as well.
ReplyDeleteMr. Methodic,
ReplyDeleteYou nailed it!
Kay,
It may have happened to you, but you never realized it or maybe it hasn't. Who knows? Maybe it's a regional thing.
Bruce,
Yes, thank goodness for the internet!
Cecil,
This charge I do understand...sort of. The rental company wants to induce you to return the car. Of course, trading $200 for a newish car might be tempting to some to keep the car. : )
Iktomi,
What a luxury to have a $75 cushion. In the old days, before I became disabled, we tended to keep a cushion of several hundred dollars. Unfortunately, those days are long gone!