Sunday, November 2, 2014
Transferring Money Slow As Molasses On Winter Day
I notice when I charge something online my credit card records it in a matter of seconds. An alert is sent via email within a few minutes. Yet when I transfer money from one of my banks to another it takes up to seven days!
Why Is That?
Well according to Ben Steverman @ Bloomberg banks only transfer once a day at a certain time and only on regular business days. Whereas credit cards operate instantaneously 24/7/365. I'm sure banks are not too hot on changing this since according to the article banks make $30b annually in fees.
I imagine many people do not realize the differences between 'current balance' and that of the 'current balance available'. My bank no longer uses the word pending. Instead those two terms which can be a real gotcha'.
Budget.. Budget.. By All Means Budget !
This is why I'm very attentive to budgeting for bills well ahead of time. Failing to digest the fact the same bills come in the same time every month seems to be a way too common ailment among bill payers. Failing to take these transfer account times between banks into consideration is especially bad for someone like me who depends on the direct deposit from Social Security every month. My bank for several months creates the illusion I have a certain balance ('current balance') when it's actually still pending.
By not budgeting one's money it can put someone between a rock and a hard place. They have two choices. Pay the bill and hope the 'available balance' becomes available before the biller attempts to cash it. OR Let the bill slide until there's enough money actually available. Both are bad choices. If the money bounces a payer can get hit with both the $30 overdraft fees plus those of the biller. Letting it slide is a poor option as well. Payees will get hit with late fees and if it's a credit card could see their credit interests rates go up 10% or more.
The thing that ticks me off is having to wait up to 7 days (if it's a weekend) for banks to transfer my money, but if it's 1 minute after midnight (on the moneychangers end) you get hammered. Bankers' on the other hand doing their money trades on the market are measured in milliseconds. It's their game and they get to make the rules. The only option we are left with is to carefully plan ahead and budget wisely. There's simply no other tool available for consumers.
Why some people continue being surprised every month (year after year) by the same utility and credit card bills is beyond my comprehension.