How long ago was it I was ragging on financial institutions for their service charges on bounced checks? Was it this year or last year?
Well, more proof that not only does anyone who's anyone in Humboldt visit this blog, decision makers in the financial institutions visit this blog for ideas and commentary as well:
I received in the mail yesterday something from my credit union, Provident Central Credit Union, notice of a new program they've started. It's called Courtesy Pay. This seems to be a replacement for getting dinged $20.00 or more from each bank involved when someone bounces a check.
My complaint wasn't just the service charges but the fact they didn't even cover the check. Courtesy Pay seems to do away with that although you still pay the big bucks. Thing is, they cover the check and charge you $20.00 for covering it. Then you have to pay up as soon as possible.
All of this depends, the mailer says, on you keeping your account active and managed responsibly. In other words, if you're one of those that's constantly bouncing checks and has an average balance of $10.00 in your checking account, you don't get to use Courtesy Pay.
For some reason I had to think for a second as to whether this was a good or bad deal. Sounds to me like it is an improvement if only because the credit union actually covers your check thus letting you avoid being responsible for the overdraft charges the receiver of your check has to pay. Still, $20 is pretty high interest.
All that said, I don't think I need to worry about it as I have overdraft protection which ends up being much cheaper than paying $20.00 for one check. Those of you that don't have such protection might check and see about it, or see if your bank or credit union offers some sort of Courtesy Pay program.
I'm wondering if this will be an industry wide change or just Provident Credit Union's?