Citi to Throw Some Love at its Customers; Process Small Charges First

Citibank is going to roll out a new practice of paying the customers’ smaller checks/charges first, potentially saving consumers millions on overdraft charges, according to this CNNMoney story. First, a little about myself.

I have, in the past, maybe spent a little less wisely than I should in a single day. A couple of books at Barnes & Noble here, an insanely delicious Robek’s smoothie there, dinner with friends (who all conveniently have forgotten their wallets), and then a few more Barnes & Noble books because it’s on the way home and I don’t want my debit card arm to atrophy. So.

This unwise spending usually happens around the time that everything in my life is due: phone bill, Netflix, utility bills, and that quarterly bill the city sends that always manages to sneak up on me even though I just told you that it’s quarterly so you’d think, wouldn’t you, that I could Jessica-Fletcher it from there, but no. And so, all those purchases added to all those automatic payments added to the fact that I keep embarrassingly low balances in my checking/savings accounts and what you get is a series of overdraft charges that, at $35 a pop, means I could have just gone ahead and bought this: The Penguin Classics Library Complete Collection: More than 1000 of the Greatest Classics. (Note: not available, somehow, for SuperSaver shipping. WTF?)

If I banked with Citi, though, I might see some light at the end of my overdraft tunnel.

Common practice for banks is to pay off the highest check amounts first. The good news: your mortgage payment maybe won’t bounce. The bad news: every other payment will. With this switch, though, smaller checks and charges will head to the front of the line, which might mitigate the number of overdraft charges you have to deal with the morning after. (The good news: your flurry of etsy.com purchases will be paid off. The bad news: your house goes into foreclosure because you bought, like, seventeen soda-can cozies.)

The article does point out that, as of press time, none of the other major banks are planning to follow suit.