I just found out that something I always suspected my bank practices is actually true. I always thought it was interesting that whenever my checking account balance was low, there seemed to be an uptick in activity. So I found out that I am not crazy. Banks do actually have software programs designed to process debit card payments in a way that depletes your balance the quickest. Here is how it works.
When you purchase something via your debit card, the bank has no obligation post the payments to your bank account in the order in which the purchases are made. They therefore process the largest amounts quicker than smaller ones. Additionally, if your account happens to be overdrawn, the bank now has the opportunity to process those little trinkets you bought at the dollar store for as much as $35 a pop. hence the famed '40 dollar latte'.
By the way there is no reason for a bank with their long 'conservative' tradition to insist on honoring a payment on your depleted account other than to rip you off. While the consumer is ultimately in charge of tracking their balances, this goes beyond good faith. Of course that overdraft fee is really a loan but they would never call it that because the 'Truth in lending act' requires banks to disclose the APR on all loans. If they did that they would have to tell you that they just charged you over 350% APR on those little charges.
This is all legal of course because the bank do actually own Washington. You are likely to hear politicians say the banks 'own Washington'. The banks have very 'powerful' lobbies. But no one will name names. An easy way to control this so called 'power'? Just ban the lobbyists from making campaign contributions. Now what senator could control something like that?
