Why do banks charge a fee on "insufficient funds"?

Question

when they know there is not enough?

Answer 1

Because it causes them a nightmare in paperwork and they have paid the other party to money only to be told there is not money; so you have to cough up the money for the check and all the administrative work on the accounts.

Answer 2

I don't understand how they can charge you insufficient fees 3x on the same transaction plus another fee of $5.oo for continous overdrawn, either. This just happened to me and I know that my account was not overdrawn, when I write a check, I subtract and then I add my balance and how much the check was to make sure I subtracted right in the first place. They charged me $33.00 x3 for the insufficient fees plus $5.00 x3 for continuous over drawn = $114.00.

Answer 3

Because whenever you put money in a bank you are loaning the bank money. When you set up an account, generally there will be a minimum balance that you have to keep available for them to use. It would be like you taking out a loan and them suddenly deciding half-way through that they can't give you the money.

Answer 4

Banks are doing a provider: looking after your money for you and fee you for that! whilst there is not any money on your account it rather is borrowed from someplace else to maintain your account.. in essence is almost a private loan and that they have got been given to fee you an inadequate money to cover the conserving of your account! My mom advised me in that her great grandmather in previous instances her great grandmothers account might rapidly close whilst it have been given too close to to drain. She had to reopen account many instances in her lifetime! nicely it rather is a sturdy element they don't do it that way anymore.. the way the open financial company debts now adays theres too plenty paper artwork for them to close an account and reopen it! some credit unions nonetheless try this by making use of request yet with out the request that's the comparable because of the fact the financial company way! some banks and credit unions enable an overdraft allowance.. My overdraft allowance is an insignificant $10.00 I in no way recover from $3.00 below! additionally my financial company emails or telephones me if account gets too low! i've got not had my account too low for over a 300 and sixty 5 days. the only time it has a tendency to ensue is after moving from one place to a diverse! moving is costly and movers fee in many instances land up greater desirable than the estimate quoted!

Answer 5

bcoz the account doesnt have sufficient funds ; even in that case bank gave out credit so only they charge a fee for that credit inspite if lack of funds

Answer 6

its there way of turning a profit on money they lost keeping your account. Insufficient funds means that they spent money to cover some of your payments or what every you bout in the first place.so they way to make that back is to charge you for it

Answer 7

As a penalty. Someone has to follow up with paperwork on transactions, and it IS illegal to write a bogus check. You could be answering to a legal charge, if someone really wanted to push the issue.

Have a great day!

Answer 8

Becuz they smell blood and want to stick it to you. The more they keep charging you, the more insufficient your funds become. It's a vicious circle which works in their favor.

Answer 9

Because it causes them a nightmare in paperwork and they have paid the other party to money only to be told there is not money; so you have to cough up the money for the check and all the administrative work on the accounts.

Answer 10

so that the client would be forced to maintain his savings and the money of the bank will still flow