Here, I don't think there is any other kind of overdraft. (One without prior approval.)

I'm not 100% sure since i've never actually overdrafted...

I mean, you can set up "Overdraft protection" which is more like insurance incase you overdraft, rather then permission.  In which case you get charged something like 12.50 a day.

Though without the protection I think it's something like $100 bucks, whether you overdraft $2 or $600.

With maybe a monthly fee if you don't pay by the end of the month?  I'm not sure.  I generally just lent the money to people I know who overdrafted the day they did so.

Unless things have changed, in the US an overdraft is a one-time charge. Most banks have now set their overdraft fees to the legal limit, since Congress was planning on implementing consumer protections. Overdraft protection in the past either deducted the amount of the overdraft from a savings account OR applied it to a credit account. You're still charged an overdraft fee, for writing a check with insufficient funds, from your bank, but the check isn't refused and you aren't subsequently charged a second fee from whomever you passed the bad check onto.

Some banks also give a similar option with a debit card. Customers, in good credit standing are given a reserve limit on their debit card. So, for instance you may only have £20 (for the UK members) in your bank account but need to pick up something for £30. You get charged for an overdraft, however your bank charge goes through (your card isn't declined).

Banks here generally do not consider it a crime to overdraft an account. Overdrafts happen even to the best of customers sometimes. However, when a person begins to pass bad check after bad check, then unfortunately the responsibility for resolving the situation is placed on the feet of the person who received the bad check. Not the bank.

Here taking a check (cheque) implies risk on the part of the recipient. There's little consequence for passing a bad check. Worse case scenario, you pass a bad check, you get sued, before the court case you pay off the cost of the bad check + court costs, and you're clear. Your bank may not like you anymore, and the person you passed a bad check to may not like you anymore, but you are legally in the clear.

The exception to this is if you pass a check from a closed bank account or a check that's false/fraudulant. That becomes a criminal matter and you can't escape that.

But bank fee wise, the US is consumer friendly. The problem is the banks keep figuring out new ways to apply fees. ATMs were a great example of this. At first, ATMs were free. Then, they started charging everyone ATM fees because someone got the bright idea to pass on the ATM fee Bank A was charged to Bank B when a customer from Bank B used Bank A's ATM. Makes sense; it's reasonable. But banks made nothing off of their own customers. They absorbed those fees. So to compensate, they started charging a teller fee. That's a fee to walk up to the counter and do your banking business with a live person.

So, the alternative we have in the US is what's called a credit union. Essentially a community/group owned bank. They typically offer lower fees and better rates.

@Kasz: TCF actually does a daily overdraft thing now until you put enough money back in to get it positive.

I also did some "opt out" thing a while back saying I didn't want any overdraft charges. Not 100% sure how it works, and quite frankly, I don't care. I don't ever intend on overdrafting.

That's what i had originally thought though your first repsonse for some reason made me think otherwise. 

What does the buffer tend to be?

Unfortunately, these costs are usually passed on to retailers. Which is why some businesses charge you for using your card/make you buy a minimum amount.  In the USA they outlawed this... which resulted in banks trying to charge for debit card accounts, consumers (obviously) kicked off, so the banks withdrew on this policy... but they're gonna have to cover this cost somewhere.

I know this post has little to do with your original post, it's just that a lot of people kick off about debit card charges in shops, etc.

I get thrown a debit card surcharge a lot, I'm not a credit card owner. More often, though, it comes as a minimum order (where the profit is more than enough to cover the handling costs) - which hits lowly students like I. Even places like Clinton Cards have a minimum order. I get hit with surcharges in those happy-shopper convience-type stores.

So to rack up these interest charges someone has to spend like $130 american dollars over what they had in the bank.

In that case i'd have to say i'm on your side.

If your going to be THAT short you should be making arrangmenets elsewhere rather then being over 130 in the hole.

Actually the "buy minium" isn't illegal in the US. (if i'm reading you rights)  It's just that is against the rules in the terms and services of every major credit card company, so they could hit you for breach of contract for it.

I'd guess if anything there is a law in the EU that prevents such a stipulation to be put in the contracts.

The new debit card fee's actually came in due to congress limiting the "Swipe fee" which is how much they charged the retailers for using the debit card.  Similar but differnet... so now a debit card/credit card swipe costs a maxium of 50 cents per swipe.. so they decided to take it out of the debit card users pockets.

Which actually is fair when you consider the fact that otherwise the prices were passed on to ALL consumers for just those that used debit... however it didn't work because people weren't used to it.

Yeah, I meant the swipe fee law. That law doesn't exist in the UK, so the banks charge the stores. I actually think this is the better system, as the banks have to cover the costs, either way, and the US way is just imposing more regulation. If the markets say that the best way about it is to charge the retailers (which seems to be the case), then that should be the way forward.

I din't realize it was just a limit, however, I thought it was a complete banning of swipe fees.

Pretty much this, keep a good controll of your finances and only sped what you have to spend, if you dont have enought dont buy it, this way youll never go overdraft...