No Overdraft Fees….EVER!

Have you ever been frustrated with your traditional local bank? Have you been charged fees that you thought were unfair? If you are like me, then you probably have had a bad experience at a bank. You make a deposit, go about your business only to realize you have been charged a fee that has snowballed into more fees? Sometimes it seems to me the the banks have a way to compute and manipulate the credits and debits and how they “post” to your account to their benefit.

In 2013 I was tired and frustrated with my bank and was willing to try anything. This is when I found an “online bank” called Simple. I began using my Simple account right away and haven’t looked back.

The first thing to know about Simple is that it is completely virtual and that there are no physical branches. This might immediately turn you off, but I promise, it doesn’t matter. The customer service is impeccable: down to earth easy to understand representatives, short to no wait times, and customer dedication. Deposits can be made with your phone and you can use your Simple Visa debit cards to make purchases or get cash.

One of my favorite features of the mobile app on my iPhone is that I receive a push notification immediately as soon a transaction is made. It lets me know where the transaction was made and for how much.

ATMs are in no shortage. Simple uses the country’s largest surcharge-free STARfs ATM network of 55,000 locations. You can use their ATM finder to see the coverage in your area.

Managing your account online at Simple.com or on your mobile device is a clean streamlined experience. You can use the tools on both platforms to create goals (i.e. Summer Vacation), create a budget, and see your Safe to Spend amount.

Best of all, they don’t charge fees!

“We’re not fans of unnecessary fees here at Simple. They’re not part of our profit structure or our philosophy. That means we don’t charge overdraft fees, bounced check fees, or monthly account maintenance fees. We don’t offer tiered service, since we think all of our customers deserve the best. ”

And you might be saying to yourself, “How can that even be possible, they have to be making money or they wouldn’t be doing it.” There is no such thing as a free lunch right?

Here is what Simple says:

“Although we love technology, we don’t knock tradition. In the past, banks made most of their profits off interest margin—the difference between the amount of interest they make on loans, and the interest they pay customers on their deposits. Our partner bank splits this interest margin with Simple.

When you swipe your debit card, the merchant pays a service fee (called interchange) to the issuing bank. Our partners split this revenue with us.

That’s it, which means that we only make money when our customers use and love their accounts.”

There are some quirks that you need to be aware of but are easily avoidable if you handle them correctly. My wife and I both use Simple exclusively, have direct deposit, and no other checking accounts. We use our Simple accounts for everything. That being said we have found a problem here and there, but have found solutions.

For example, there are certain purchases you can make that will possible put a larger than normal “hold” on your account. If you dine at a restaurant where you leave a tip on the check after the card is swiped, Simple will assume you are going to tip 20% and add 20% to the pending amount. This usually isn’t a big deal because always tip around 20% anyway.

So, lets say your bill is $20 you will see the pending transaction for $24 as soon as your waitress swipes your card, but she took FOREVER doing so and the service wasn’t perfect and you decide to only leave a 15% tip. So when she brings the slip back for you to sign you add $3 to the “TIP” and sign. Your account will still have the $24 charge pending until the restaurant finializes the transaction (sometimes immediately, sometimes at the end of the day, or even the week). Once they finalize that transaction, you will see the final total $23 post to your account and the extra $1 will be available to spend.

SOLUTION: Usually this small amount doesn’t have much impact on us. However, if we are ever worried, we just use the ATM before we eat.

Another tricky occasion using your Simple debit card is at gas pumps. Every gas station seems to be different, but for our go-to gas station we see a $25 pending transaction if we swipe our card at the pump. Just like at the restaurant, if you only get $20 in gas, the extra $5 will be available to spend once the gas station finalizes the transaction.

SOLUTION: Go inside to pay. If you usually get the same amount of gas each time it is easy. Just don’t pay at the pump. What if you need to fill up and can’t estimate how much it will be? We have found many gas stations that allow you to “pump first” as long as you have a loyalty card.

What do you think? Are you ready to ditch your traditional bank for Simple?

Please note: I reserve the right to delete comments that are offensive or off-topic.