Have you ever noticed the excellent benefits most banks offer as long as you have money in the account? If you have money in your account the bank will reward you with no fees, free checking, free checks, refunds from ATM’s, and a high interest rate on your money in a lot of cases. However, if you are running low it’s a whole different story. Is this stealing from the poor to feed the rich?

Most people with bank accounts never have problems until their accounts are low. What amazes some people is the money a company can hold from your bank account without even making a purchase or while trying to get a refund. My brother opened a tab at a bar while enjoying a couple of drinks and it cost him an extra $175. He had some cash that night but did not want to keep paying for each drink. So as many people do he opened up a tab. What he did not know was that, the bartender put a $100.00 hold on his account until the tab was cleared. The problem, it took three business days for the hold to be released from his account. How did this cost him $175?

The tab including tip added up to be $32 that night. This was on a Friday night. He had about $400 in his account before making any purchases but he had paid some of his bills that would also come out of the account. So here is how his account was overdrawn even though he had the money to cover his spending. His car payment $305, plus he had paid $28 for gas, $25 for food and he had bought some misc stuff for $10. His whole check as always was spent on payday. His evening cost him…

• $305 + $32 + $28 + $25 + $10 = $400

WRONG, The $100 hold from the bar tab he was unaware of made all his expenses bounce through the bank. Here is an example of his online statement.

• Pending Transactions $100 XYZ bar 
• Car payment $305 NSF (did not clear) -$5
• Overdraft fee by Your Bank  -$35
• $32 Toy Purchased (did not clear)
• Overdraft fee by Your Bank -$35
• $28 Gas Debit (did not clear)
• Overdraft fee by Your Bank -$35
• $25 Food Debit (did not clear)
• Overdraft fee by Your Bank -$35
• $10 misc Debit (did not clear)
• Overdraft fee by Your Bank -$35
• New Balance -$175.00

If you look at the whole picture he spent $400 but it cost him $575. He was lucky his bank has overdraft protection and covered his expenses but it is very hard for him to understand that. If he would have made just $5 more he would have saved $175.

So by running too low on your funds you are playing with fire. As his bank explained many merchants can have a hold for open items, refunds and other transactions such as tips that could end up costing you big money. With the advances in technology I hope banks can fix these issues that could help many people living pay check to pay check save hundreds of dollars each year. A good idea would be to build up your bank account and it would cost you less and you may even make more money. Banks probably make more money from the poor than the wealthy. Is this right?

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