Bank Support

How much do you know about banking? What happens when your account goes negative?  Is it better to use a credit or a debit card?  Why do title companies prefer wire transfers? For quick answers to these pressing questions, learn more from Alex, your banking expert.

Question:  What fees do I get when my account goes negative? – Kyle from Boise, Idaho

Answer:  Banks generally charge an overdraft fee (usually around $30 to $35 per item).  This occurs when the bank pays for an item, whether by check, ATM withdrawal, debit card transaction or other electronic means, which causes your account to be overdrawn.  Another fee banks generally charge is a return item fee for non-sufficient funds (which is also around $30 to $35 per item).  In this case, the bank makes the decision to return the item because it would cause your account to either be overdrawn or more overdrawn.    Finally, banks can charge a continuous overdraft charge.  That means they will charge you an additional fee if your account remains overdrawn for a certain amount of time (normally 4 to 7 business days).  This fee is also around $30 to $35 per incidence and can occur multiple times until your account has a positive balance.  For more information, read your bank’s fee disclosure.  Banks are required to provide it whenever you open an account, but you can also pick it up at your local branch or view it online through the bank’s website.

Question: Which is better to use a debit or credit card? – Sam from Tucson, Arizona.

Answer:  I recommend using a credit card.  Both debit and credit cards offer zero fraud liability.  That means that if a fraudulent transaction does occur you are not responsible for that transaction.  To file a claim, you need to submit a Cardholder Dispute form to the card issuer.  It can take up to 10 days to receive provisional credit and up to 90 days to resolve it.  For that reason, I recommend using a credit card instead of a debit card.  Transactions from a debit card are taken directly out of your checking account.  If a fraudulent transaction occurs, it can take several days to get the money placed back into your checking account.  With a credit card on the other hand, fraudulent transactions are charged to your bill.  When you file that claim, you simply don’t pay that fraudulent transaction and it will be removed from your credit card bill in a few days.  Not to mention the fact that a lot of credit cards offer rewards when you use them, and most credit cards don’t charge interest on purchases if you pay your credit card bill on time and in full each month.

Question:  Why did my title company require funds to be wire transferred when I purchased a new home? – Carol from San Diego, California

Answer: Wire transfer is a fast way to move money electronically from one person or entity to another using a bank or provider like Western Union.  They are useful because the money moves within one or two days, and, in the United States, same day transfers are possible.  Most title companies prefer the funds to be transferred via wire transfer because the funds clear quickly and no holds are placed.  With checks there is a possibility that they can bounce (be returned) and it takes several days to find out if that happens.

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Written by: Alex Sanchez, Branch Manager

Important: For your specific questions about banking, contact your banking expert, Alex, at: alexexpertbanker@gmail.com

Alex is starting his 18th year in the banking industry.  He has worked for such notable banks as Bank of America, US Bank, and Chase.  Alex has his bachelor’s degree in Business Economic from the University of California Riverside.