Welcome back beloved viewers. In today's episode TV Dr. Smarmypants will explore the vicious world of the Overdraft Fee.
Fireside in the lounge chair, pipe in mouth, glass in hand. TV Dr. Smarmypants peers over his glasses at Charlie's bank statements with a slight frown and furrowed brow. He looks up and pretends like he is just noticing that you entered the room.
"Oh, hi there. I didn't see you come in. Let's see how young Charlie is keeping up with his new checking account shall we?" He waves you over and the camera zooms in on the statement. Different points at which the account had a negative balance are rapidly displayed with dramatic action smash sound effects accompanying them.
"Uh Oh! Looks like little Charlie has had an accident. When a checking account has a negative balance it is considered overdrawn. This means that a grave error has been made, and Charlie has entered into a world of pain. Here we see where Charlie tried to spend some money that he didn't have." TV Dr. Smarmypants taps the offending transaction with the mouthpiece of his pipe and shakes his head. The disappointment is palpable. He puts the pipe back in his mouth right after he touched the chili statement with it. The one he got out of the trash. Gross.
"Predictably Charlie has transferred the entire $500 from his savings account to his checking to cover his rent. However this caused a $15 monthly service fee in the savings account for going below the minimum daily balance. Several days later you can see where an automatic transfer is made into the savings account for $25." Cut scene to Charlie reading about his account online. There are double rainbows flying around and a big butterfly and everything. He sets the transfer up with a tap of his finger.
"Making a scheduled monthly transfer is an alternate way for Charlie to avoid his monthly service fee in his savings account. Now he won't have to keep the minimum balance in the account, and he has brought his Savings account back into a positive balance. Great job handling your savings account Charlie! Let's see how young Charlie did on his checking account." TV Dr. Smarmypants shuffles the papers over to the checking account. Takes a long pull from his glass and a luxurious draw from his pipe.
"So now young Charlie is down $25 for his outstanding rent check, but he knows it, and he deposits $40 at the ATM to cover it." Cut scene to our boy Chuck slapping two crisp 20s into the machine, high-fiving himself and joyously declaring that the problem was solved forever. Cut back to TV Dr. Smarmypants glowering and shaking his head ever so slightly. Even the pipe seems to be smoldering disapprovingly.
"And this is where he was so wrong. This wouldn't be the last time he used that debit card before his check cleared, and those transactions were going to cost him more than he realized. Here we see a transaction at Moondoes Coffee and another at South Dakota Road House Steak House All you can eat Buffett." TV Dr. Smarmypants taps the statement for emphasis with his pipe. Ewwww he did it AGAIN! Wait, was that the statement he stole out of the mail? Ok, that's not as gross. On the other hand who knows what got on that letter during the shipping process. And it was shoved in the mailbox with all that mail that all those other people handled. And he's been touching it himself with his own gross chili hands that were touching the chili statement that he is rubbing up against the stolen mail statement right now. Still Gross.
Cut Scene to Chucky boy living his life, getting his morning coffee, smiling at the camera. Then he stars in a montage of adult-ing through his work day like a productive member of society. Approximately one guitar solo later Chuck is stepping out of the montage and into the local South Dakota Road House Steak House all you can eat Buffett. "Man's gotta eat." says Chuck.
On the left side of the screen you see Chuck signing his Moondoes Coffee receipt. On the right side of the screen you see Chuck signing his South Dakota Road House Steak House all you can eat buffet receipt. The servers drop down the bills simultaneously on either side of your screen. The Coffee is $3. One admittance to the South Dakota Road House Steak House all you can eat Buffet experience is $10. After dinner Charlie checks his phone and sees the following breakdown of his transactions. He had a balance of $475 in his checking account. This was $25 less than he needed to cover his rent check. He deposited $40. That brings him up to $515. He has $13 in pending transactions. He still has $2 to tip his server. He tips his server $2 for dinner...at the South Dakota Road House Steak House all you can eat Buffet experience now with free drink refills. Cut scene back to TV Dr. Smarmypants in his lounge.
"Very generous of you Charlie! Especially since you technically had to get your own food. But there is just one little thing you didn't account for. That wasn't the only time you tipped that day." Minor Chord. Dramatic disapproving face. We here at Financial Fables want to be clear that we in no way disapprove of tipping. We used it as an example because it is a type of transaction that shows as one amount when it is pending, and another amount (tip included) when it fully posts to the account. In America servers do not make a living wage, and they rely on tips to make ends meet. If you can't afford to tip, you can't afford to eat out.
Cut back to the double receipt signing screen and the two servers bring back the checks after running the card. Chucky boy tips $2 at the South Dakota Road House Steak House all you can eat buffet experience now with free drink refills and Animatronic Animal Show and he tips $1 at Moondoes Coffee.
Cut back to the paternal disapproving face of TV Dr. Smarmypants. "Little did young Charlie know his generosity had just lowered his balance to $499. One dollar lower than his rent.* We can see the $500 check present for payment here. This causes a $35 overdraft fee, and enters Charlie into the first circle of banking Hell. Welcome to Hell Charlie." The shadows cast by the firelight make TV Dr. Smarmypants maniacal expression look all the more infernal.
Tune in next time as TV Dr. Smarmypants teaches us more about fees and Charlie descends into a lower circle of banking Hell. Bye Bye for now!
*Some banks will not charge an overdraft fee when the balance is only overdrawn by a small amount like this. Charlie's bank apparently still charges it because it makes the example more dramatic.
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