Bad DayThe sizzle of steaming milk hits his ears as Joe releases the cold aluminum handle of the glass door. He heads in for his morning Venti Javachip Frap 3 extra shots. It would cost $4 of his last $10, but it was worth it.
The subtle murmur of 20 conversations bounce around him accented by a soft soprano and warm saxophone wafting down from above. He takes a deep breath as he is assaulted by syrup flavors and brewed coffees, a warm welcome before a long cold day.
His next client should be here in just over an hour, just enough time to prepare and get the jitters out. I really need this one. As he makes his way through the line, images of stacks of unopened mail rise, as reminders of debts and overdue bills threatening to steal his one moment of morning peace... he brushes those thoughts aside as he takes a deep inhale of the coffee and pastries around him. It's his turn. He hands his card to the cashier and scans the cafe'.
People are sitting around talking with one another. Others are reading intensely. One young man is totally passed out, leaning against a wall. His eye drifted to the other end of the restaurant. His favorite chair was being evacuated...
"That's odd... Let me try that again..." The voice in front of him. The haze lifts as he is brought back to the moment... "I'm so sorry sir. Your card as been declined. I tried it twice but it's still not working. Do you have another card?" Such a sweet young voice to deliver such crushing news...
"No... I'm sorry..." his words trail off as he takes back his card and leaves, shoulders and head down. Not this again. Did he misjudge his balance again? He checked it just the other day.
"Hey! I've got his on my tab..." says a deep gentle voice from behind.
Joe looks back, slightly confused for the moment, to see a man in his mid 50's, threads of grey well blended into his black hair wearing a dark blue jeans and an overcoat. The man smiles graciously at Joe. Joe replies: "Thank you sir!" followed by a regained, though slightly self-conscious, smile in return.
The elder man simply put up his hand in a half wave and paid the lady, then walked to his own seat and pulled out a book... quickly lost to his own world again.
Joe took his coffee and sat down in his favorite chair. It wasn't usually available, but this time no body was there. He placed his coat over the chair next to him, reserved for his client, and melted into the smooth cool leather. He pulled up his Bank App to check his balance and confirm his suspicion.
"$367 Negative! What the...!?" He stares in disbelief at his phone. How could this happen to me. It's not fair. That bank is trying to rob me and I can't do anything about it, it's just not fair! ...moments later, he noticed the gentle stranger was standing in front of him.
"Do you mind?" The stranger motions to the chair with the jacket.
A faint nod of approval and the man laid the jacket on the back of the chair and took a seat. Joe's palms are sweating head begins to throb. Images of bills, and more bills come rushing back into his mind. Those telephone calls at odd hours from people demanding to be paid... "If you don't pay you'll leave us no option but to sue you!" the voice of his last phone call the night before still ringing in his ears.
"My name is Max. What's your name son?" The gentle man doesn't seem to be intruding, just coming over out of genuine concern.
That's when he noticed a few stares from other coffee shop guests. "Joe."
"What seems to be the problem?"
"My bank balance. It's negative."
"So the bank balance came as a shocker this morning huh?"
"What's causing the problem? Fraud in there somewhere?"
"I don't know."
"Well it seems you have a fancy little app there to tell you what transactions came through. Look them over and see if any are out of place. If you didn't do something you can call and let the bank know and they'll fix it for you."
Joe took a cursory glance at the purchases. But he knew what he'd find. "It looks like these are all mine. I just don't understand why the bank does this. They hold items and don't show them just to make me pay overdraft fees..."
"Now..." The man's eyes looked straight into Joe's, eyebrows crinkled slightly up, and a faint smile whisked his lips. "...this may overstep my place a bit, but I really want to help. Didn't you basically know before you opened the phone what you'd see?"
"Why would you say that? Of course not. Why would I be at the register handing a card I knew wouldn't work?" Of all the rude things to assume... then again, maybe he was right... just a little.
"Well yes, that's true. But you looked like you knew, and half expected it, when she said it was declined. This isn't the first time is it?"
Nailed! "No sir." Joe was officially undressed before this kind man.
"Well, Joe, can I tell you that when I was younger..." Max readjusted in his chair and leaned forward a bit. "I paid $300 per month in overdraft fees for quite a while?!"
"You did?!" Joe sat forward too.
"What if I told you that you could make a few changes and never pay another overdraft fee for the rest of your life?"
"What? That would be awesome, but that's not possible. These banks have you over the coals. They post things out of order just to make more money off of you."
"Well..." Max's smile broadened. "Actually they post things according to very strict laws that deal with how merchants are allowed to process, and there are many things going on between the government, bank, credit card companies and merchant stores that you wouldn't understand right now. They post them when the merchant says to. The real question is..." Max pointed at Joe and leaned even further forward. "...are you going to be the victim of an over-sized bureaucracy or are you going to take control of your money are win? Max leaned back, folded his hands onto his lap and did nothing. Just breathed and kept his eyes locked onto Joe, even when Joe looked partially away.
This guy is good. He'd set out his hook, laid out his teaser and bait. Now he was through. He wouldn't make another move unless and until Joe did. Joe knew that because he was a trained sales person and this was the best sales pitch he'd ever seen. This guy was using all the right sales methods and words, but he was struck by how genuine and strong this man was. He couldn't really place his finger on why, but he instantly knew he could trust him. Glancing at his watch just to make sure he had the time, he did. "Sure. I'll bite. How can I avoid overdraft fees for the rest of my life?"
"It's actually not hard at all. But it does take understanding about how things work, and a new way of doing things. Pull up your app there, and find a link that will take you to services or customer service, whatever they are calling the self service area of their app. Once you get there, find anything that says 'Overdraft'."
Joe found the link to services. He found another link that said "Overdraft Services". "OK, got it."
Max leaned over to look at the app with Joe. "Good, now you see here that there are two services mentioned?" Joe nods. "This one here is Overdraft Protection. It's very standard, most banks offer it in one form or another. It refers to taking money from your savings or credit card and putting into your checking if you checking becomes negative. Now... when's the last time you had money in your savings?"
"I can't even remember a time." Joe replied.
"Exactly! So that's not very helpful. And how's your credit card?"
"My credit card is maxed out with them."
"Aha. The few times you do have something in your savings they charge you a fee to transfer you own money over... So Overdraft Protection is basically pointless right?"
"Yes... I guess it is."
"OK, step one, De-Link your savings and credit card as Overdraft Protection." Joe clicks a few buttons and it's done. Interesting way of looking at things. Max continues, "Now you see this other service here? It's called Overdraft Service. It's completely different from Overdraft Protection. This is actually giving you a choice you probably didn't know you have. Right now you are enrolled in the Overdraft Service. So every time you swipe your card and the money is not there the bank is letting the purchase through and charging you fees for it. Then when the account is really overdrawn because you didn't keep a good record they stop approving the transactions until you bring it positive. So you are getting what you wanted to buy but paying fees for it right?"
Joe just keeps nodding and listening. "So then, you go to the gas station, you make a purchase for $50 to fill up and it was pending for $1 that first day. You see here, how that gas station was done on Monday, but it's barely posted last night? You checked your balance, thought you had money you didn't have so for two days you've been spending money you already spent. Then when those other transactions came through they all posted negative and caused fees. You ended up paying several fees last night and tonight for purchases. Then your bills came out in the form of checks and e-checks and they posted negative. It all snow balled. Half of this balance in fees."
Joe looked at Max. He was still smiling so he must not be done. "So I have a say in this?"
Max continued, "Yes you do! If you did not enroll in that service and you went to make a purchase with your card and there was no money in the account the card would have declined instead of being approved. No overdraft no fees."
"Yes... but in this case my gas station purchase wasn't showing and the balance thought I had money, so would that have helped in this instance?"
"Actually yes. Because the bank cannot charge you fees for card purchases if you are not enrolled in the Overdraft Service."
"So if I hadn't been enrolled, this whole thing would have played out the same, but with no fees?"
"Almost. No fees for card purchases. The checks and e-checks still would have had fees. But since 3/4 of the fees were from card purchases, that would have solved 3/4 of your problem, yes... " Joe noticed the sun breaking through the rain clouds through the window.
"So I can turn this off and no more card fees?"
"Almost. There is one caveat'. You can still get fees for Recurring purchases, such as Netflix, LA fitness, or your car insurance. But all one time purchases and ATM withdrawals will either be declined, no fee you just don't get what you're trying to buy, or if they do post negative due to checks you still won't get fees."
"I'm turning this off now! That is NOT how my banker explained it to me. He just said that setting it up will help me in an emergency and I would have 24 hours to make it up without fees."
While Joe scrolls through screens and options turning the feature off Max explains,"Turn it off, and your banker was an idiot. Maybe, there is a slight chance you get a deposit it the SAME DAY before they cut off their posting for the day, but it's unlikely, and definitely not 24 hours."
"OK! That's done. No overdraft protection and no overdraft service." Joe looks at his watch. "My client will be here in a half hour."
"I think that's good for now. I've got more ideas but I have to get running." Max pulls out a card from his coat pocket. "Why don't you email me if you have any questions about what we talked about. Let's plan on meeting here next Friday morning
"Well let's see. We stopped fees for purchases, which was 75-80% of your battle. Now let's deal with those last pesky payments. Anytime you use your account number or card number to pay a bill you run risks. The company takes days to clear the payment. The company takes a payment they weren't supposed to, take a payment after you told them to stop, they take the wrong amount, on the wrong date, and basically just mess up your account. So we need to completely stop giving your card or account number to other companies. Even checks can be turned into electronic items and mis-processed or you simply forget to write it down. The more you control things, the less they control things, the better. We need to pay bills without using checks, account numbers or debit card numbers."
"How am I supposed to do that?"
"Now you have options. You pay in person with cash. You take out cash and buy money orders and mail them..."
"Wow, that would be a lot of extra work and cost to pay for envelopes and stamps and money orders."
"Yes... but not as much cost as paying for overdraft fees."
"But there is another option. You can use your bill payment service through your bank. Almost every bank offers one now. Pull up your app again...." Joe unlocks his screen and goes back to the main menu. "See here. 'pay a bill'..."
"I think I noticed that before but I never paid attention to it."
"You can get prepaid debit cards from various places with way less hassle than your bank gives you. This bill payment service is one of the only reasons to have a bank account. Check it out. You can make a payment to any bill. It doesn't have to be automatic, you just type in the amount, select a date and hit send. The money comes out of your account today and it's done. No waiting days for it to clear. Best part? The other company never gets your account number. I even send my mom birthday checks through bill payment service at my bank. She gets a cashiers check in her mail box within a week. But most of my payments are large companies so they get the payment in 1-2 days electronically."
"That sounds cool. But what if I'm paying it the day it's due?"
"That's why you can't just have the tools you need a system to use them the right way. There's a few more things to discuss."
..... "Let's meet again and talk about how it's working for you. When would be a good time to meet?"