I was doing some online banking last weekend when I noticed that one of my kids’ student accounts was significantly overdrawn.
(No, I won’t say which kid. Yes, I’m protecting the guilty. And yes, some of our kids’ bank accounts are connected to ours so we can easily transfer money for things like textbooks.)
By “significant” I mean six separate NSF (non-sufficient funds) fees of $35 each, over a period of less than a week. That’s $210 in fees for a kid making just pennies more than minimum wage – a kid who’s attempting to contribute to college expenses, knowing that his/her parents are doing all they can, but that having three kids in college simultaneously and one parent unemployed is difficult, at best.
Granted, it is my adult child’s fault that s/he didn’t keep an eagle eye on the bank account… and granted, bank fees are a necessary evil and meant to sting. But really? $210 in a week? Ridiculous!
When I called the bank and inquired about fees on a student account, I was told that one solution is to have the student (who, remember, barely earns minimum wage and only works during school breaks) apply for a credit card.
A credit card? At 24% interest? For a non-employed student? “Sure,” she insisted. “It’s a good way to avoid those pesky fees” because the money is transferred right from the credit card account to cover the shortage.
Wait a minute! Now the non-employed student has a credit card bill – with interest – and no way to pay it off! (Does this remind you just a little of banks making home loans to people who didn’t have the means to pay them off?!)
This is a good idea, HOW?
Ohhhh, it’s a good idea for the bank because now they can collect interest on the charged amount and fees when said student can’t pay the bill! I seeeee!
I’m no whiz with numbers and I’m no economist or financial advisor, but how’s this for an idea:
How about you (Bank of America!) TEXT my kid when s/he comes dangerously close to overdrawing? The cell phone never leaves my kid’s pocket/purse and texts are part of his/her life anyway, as are ways to swiftly rectify the problem via online or phone banking. How’s THAT for an idea, Bank of America? Everything else is automated – why not automate a program like this? You know the technology exists and would be easy to implement, so what’s stopping you?
I know you’d be out gazillions of dollars in fees. I know you’d probably not be opening that credit card account that will likely be ignored – or worse, abused -- when money is tight. I know this isn’t PROFITABLE in the short term.
But it’s profitable in the long run. Remember customer service? Well, this is a service to a customer you probably want to keep, because at some point s/he’ll have to put that college education-enhanced income somewhere and I’d think you’d want it to be with your bank.
Anyone with me on this? Let’s start a movement! (But not this week because Seattle is suffering through an unprecedented heat wave and… well, I can’t move.)