Debit Card, bank allowed charge that dropped balance below zero.

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Forums › Finance and wealth management › Debit Card, bank allowed charge that dropped balance below zero.

rugrat

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#257375 29-Sep-2019 16:21

Thought no one could take more money then what is on card?

Had Spotify three month trial, obviously it’s gone by and Spotify charged $14.99 to my card.

I agree it’s my fault with charge for not canceling, what has surprised me is the bank allowed a transaction to go through which was higher then the $2 on card.

I’ve always been telling people to use debit cards and just put money on prepared to spend, looks like they don’t protect you by having limited money on them at all?

I wonder if I’ll get charged overdraw fees, when the bank should’ve declined the transaction?

surfisup1000

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#2326764 29-Sep-2019 16:25

Banks have been doing this for years... not sure if it is all banks though.

What is the bank/account type?

Kiwifruta

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#2326766 29-Sep-2019 16:31

Depends on the account and bank. Some accounts let you go over a little. Best to speak to your bank, to find out how your account is set up.

Source: I used to work in banks.

sbiddle

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#2326767 29-Sep-2019 16:33

This is perfectly normal and something most banks will allow. It's much like credit card limits that are not a hard limit as such and you can go over these by a moderate amount.

rugrat

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#2326776 29-Sep-2019 16:59

surfisup1000:

Banks have been doing this for years... not sure if it is all banks though.

What is the bank/account type?

Bank is ANZ, card is debit card (I.e money on it before spent), just linked to savings account, I have no arranged over draft facility.

i might go and ask the bank if I can have a hard zero balance limit so everything declines after that. If not I may get rid of the card, either that or keep it blocked when not using, and unlock it just for each time I use it.

richms

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#2326778 29-Sep-2019 17:03

My understanding is that even when blocked, pre-authorised transactions will still happen. May not achieve what you want.

Richard rich.ms

rugrat

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#2326781 29-Sep-2019 17:05

I might be alright fee wise, the transaction only went through today and I’ve transferred money to cover it and a bit more.

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Senecio

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#2326807 29-Sep-2019 18:19

Part of what you’re paying for when banking is convenience. It’s convenient to allow a small spend to proceed when the remaining balance isn’t enough. It would be different story if it were $100’s or 1,000’s of dollars but banks will let this sort of thing slide as that’s what most people want. Your use case is unique to you.

tardtasticx

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#2326823 29-Sep-2019 19:42

With most banks you need to request to completely disable overdraft. When I setup accounts with ANZ and BNZ, I asked for overdraft to be turned off, so theres a code on the account that will decline anything if the balance isn't enough.

You can have two types of overdraft as well: Arranged (Bank lets you spend up to a certain amount below a $0 balance, with a specific interest rate for that amount) and unarranged (No hard limit, at least as far as the customer can tell, higher interest rate than arranged overdraft usually). You can have both, by exceeding your arranged overdraft and then going into an unarranged overdraft.

OldGeek

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#2326938 30-Sep-2019 08:14

tardtasticx:

With most banks you need to request to completely disable overdraft. When I setup accounts with ANZ and BNZ, I asked for overdraft to be turned off, so theres a code on the account that will decline anything if the balance isn't enough.

You can have two types of overdraft as well: Arranged (Bank lets you spend up to a certain amount below a $0 balance, with a specific interest rate for that amount) and unarranged (No hard limit, at least as far as the customer can tell, higher interest rate than arranged overdraft usually). You can have both, by exceeding your arranged overdraft and then going into an unarranged overdraft.

Also bear in mind the banks will always take the option that gives them the best return. Decline a transaction and they get nothing - not even a transaction fee. Accept a transaction and they get the fee along with a 'loan' on the negative balance. Check out the ANZ rates on overdrafts (particularly the 'unarranged' type).

Some years ago I tried to do exactly what you want - decline any transaction that will take the account into overdraft. The ANZ declined to do this. Things may be different now - good luck.

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Sounddude

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#2327004 30-Sep-2019 09:30

richms:

My understanding is that even when blocked, pre-authorised transactions will still happen. May not achieve what you want.

Depends on the Bank I guess. I blocked my Kiwibank credit card in the app, and it declined _everything_.

pom532

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#2327030 30-Sep-2019 10:30

OldGeek:

Also bear in mind the banks will always take the option that gives them the best return. Decline a transaction and they get nothing - not even a transaction fee. Accept a transaction and they get the fee along with a 'loan' on the negative balance. Check out the ANZ rates on overdrafts (particularly the 'unarranged' type).

At least ANZ only charges if your balance remains negative at the end of the day. It's so easy to forget a payment etc.

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JayADee

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#2327863 1-Oct-2019 16:40

I had this happen once also with ANZ on a debit card linked to a savings account and was as surprised as you. Upon calling they did say I could arrange to change it so the card can’t go less than zero. I just left it as is.

Edit: I think they give you 24 hours to get the balance back to zero before it incurs a fee.