That's like......every normal bank account? At least in Poland, UK and Germany(as you mentioned). By default you don't get any overdraft, you can't go below zero so to speak. If you do(with an offline transaction that wasn't authorized live with the bank) then usually you get 24 hours to pay it off and start paying heavy penalties beyond that point.
Transfer most of the money to the savings account and then when getting declined buying food top up the card account and rely on it instantly being available. Having negative trigger each time going above the pre-planned spending for the month.
Hell, I still do it. I have one card for groceries which gives me a mental picture of how much I have spent on food given what day it is when it gets declined each month.
I would presume this comes from being the generation that grew up only knowing about debit cards. Most got a personal one at the age of 13 or so and never really used cash. Guessing it is even earlier today.
Didn't get a credit card until first time I was planning to rent a car when travelling knowing how much easier it would be.
I still don't use a credit card for that. I have a debit card that's part of Visa, so most businesses don't care whether it's debit or credit.
(I don't have a credit card.)
IME they eventually end up abusing it (repeatedly not paying the fees) and then the bank closes their account, at which time they move on. One way they strategically avoid or delay paying the fees if they can't / don't want to is by avoiding direct deposit. Then, you can either deposit the check (ready to pay overdraft fees and get account positive) or cash the check at a check-cashing (for a fee that will likely be less than the overdraft + overdraft fees).
No. Every normal bank account can go overdrawn. Try it: low value purchases or withdrawals are not transactional (they are eventually consistent).
Banks in Denmark are obligated to extend a basic account to all customers and usually do it with a debit card. Ie. no offline transactions and no transactions that can not be immediately cleared.
I don't know why you dismiss this. If you are from the US then be aware that EU and US banking systems are wildly different (where the US system is really good for the wealthy people).
If you are from EU, then it sounds like you haven't changed your banking situation or stayed up to date in at least 15 years.
- A portion of the check is made available to the casher (said to be "cleared", but not really) before the writer's bank even responds
- After the writer's bank has cleared the check, it can still reverse the transaction and take back the funds. For example, if the check is found to be fraudulent.
So, for example, you can deposit a check into your account, wait a month to be sure it's cleared, take the money out, and then have the money "taken back"; leaving your account in the negative. As such, even for accounts that don't have any "line of credit", the bank still winds up "lending you money". Effectively, EVERY bank account in the US has credit built into it in some way.
Note that, when we're talking about a fraudulent cheque, and it being clawed back, it's already been cleared by the source bank. As such, there is no longer a difference between the check and a real time debit.
Basically, I wanted the German experience where your transaction is just declined, if you don't have the funds, without further repercussions. In the UK, the banks might or might not approve that transaction, and definitely charge you an outrageous fee either way.
The only choice on offer in the UK at the time was whether you pre-arrange an overdraft, which is slightly cheaper (but still expensive). Or whether they give an you an 'unarranged overdraft', which you can't not accept, which is crazy expensive.
But I agree, the traditional banks have had a hard time getting up to speed while new banks seems to see it as a way to handle their liability: At Revolut scale you can not manage individual customers with negative balance while offering the service at a competitive price point.
At the end (around 2017 or so), I got a Monzo account, and was very happy with them.
Example: https://www.barclays.co.uk/current-accounts/basic-account/
I assume the debit card is configured to refuse offline transactions.
This, combined with the fact that welfare must be paid by bank transfer in nearly all circumstances, means that a) essentially everyone in the UK has a bank account and b) cheque cashing isn't really a thing. Some banks have an account-opening service specifically for people with no fixed address and/or no identity documents.
From a UK perspective, the situation in the US just looks like a completely avoidable policy failure.
https://assets.publishing.service.gov.uk/media/63f7bbd78fa8f...
https://england.shelter.org.uk/professional_resources/no_fix...
That's the first time I've ever heard that assumption, and I live in the UK - basic checking account(with no overdraft) is just what everyone has by default, if you want credit you just apply for a credit card - that's my experience at least.
Most people have an ordinary account like this one: https://www.barclays.co.uk/current-accounts/bank-account/
However, the general situation for overdrafts seems to have changed since I left the UK — I don't know the details: https://www.theguardian.com/business/2020/jan/28/uk-banks-ov...
The banks presumably make a loss on these accounts, at least in the short term, and seem to hope you'd give up and try with a different bank.
A Bulgarian guy in a flat share was keeping his money under the bed as he had been turned away by the banks. I printed the "Basic" account information and with that in hand he had an account the next day.
(This might all be 10-15 years out of date.)
This usually meant the customer would need to call up a service centre, who would arrange a ‘planned overdraft’ of sorts, still with zero fees, but it would allow them access to a portion of their funds and we’d do the same again the following week and so on.
Very inconvenient for all involved, these people are often completely financially illiterate (and frequently just illiterate) and have zero clue how to manage their bank account. I tried to educate them consistently, but week in week out I had the same conversations with the same people when they didn’t understand how they had no funds available to them, even though they’d been ‘paid’ that day.
I appreciate the thought put into the answer, and I do grasp that the point is that the EU system has converged on much faster resolution times than the US and different social systems based on that etc. There just always are tons and tons of weird edge-cases (what if you get a court-ordered transaction reversal or order to the bank somehow etc) that lead to the same "you're overdrafted, and you have to pay up and then pay a fee..."
First: this situation does not happen in EU. Alle restaurants have connected handheld devices.
But when an EU citizen go to the US and pays? I reckon that the restaurant would have a check that bounces and won't get paid.
This is combined with the fact that no account supports cheques anymore.