Retail stores have offered store credit cards for decades, but now there is a new phenomenon in retail banking with store debit cards such as the Nordstrom Debit Card.

These debit cards are linked directly to a customer’s checking account, and they allow shoppers to enjoy the perks of a store credit card without having to go into debt. In the case of the Nordstrom bank debit card, shoppers earn reward points that can then be used for purchases at Nordstrom department stores.

However, these cards do come with some downsides and one of those downsides is overdraft fees. One of the reasons that this is a problem is that purchases made with the Nordstrom debit cards do not clear bank accounts the same day like when a shopper uses their bank debit card.

“Instead, the cards simply trigger the type of transactions that are used for online or recurring payments, such as for mortgage or utility bills,” the Boston Globe explains. “These transactions take longer to clear; Nordstrom and Target say transactions should appear within three days.”

Because these transactions take longer to clear, there is also a higher chance a shopper may overdraft on their bank account.

The Globe explains that “customers may not be able to opt out of overdraft programs for such charges, either.”

Nordstrom Bank charges a “Returned Payment Fee,” or overdraft fee, of $25 for any payments that don’t clear. In addition, shoppers will also be billed for their purchases.

Overdraft Definition

An overdraft is a situation that occurs when money is withdrawn from an account and there is not enough money to cover the transaction, causing the available balance to go below zero. This most commonly happens when a debit card purchase is made at a retailer, or when cash is withdrawn at an ATM, or on bill pay services.

As part of an overdraft service, the financial institution can choose to pay for the transaction and essentially make a loan to you so you can complete the purchase. In return, you are charged an overdraft fee for the bank helping you out with the short term loan.

Sometimes, however, these fees can quickly add up, as individuals can rack up huge overdraft fees for small purchases.  If you have $10 in your account but buy $20 in gas on the way to work, a $10 lunch, and a $5 coffee on your way home, you could be hit with $60 in overdraft fees for going over your balance a total of $25 three times that day.

Some financial institutions have a daily cap that they place so you are not charged too much in any given day. However, some banks have allegedly taken advantage of customers by employing allegedly improper practices, like processing transactions out of order to rake in more overdraft fees from consumers, which really skews the boundaries of your standard overdraft definition.

Nordstrom Bank Overdraft Fees

In the case of an overdraft that occurs as the result of making a purchase with a Nordstrom debit card, consumers may run into the problem of transactions clearing when there is no longer enough money in their account even if there was at the time of the purchase.

Not only will Nordstrom consumers get hit with an overdraft fee from Nordstrom Bank, they will most likely also get hit with an overdraft fee from the bank where they have the checking account that their Nordstrom Debit Card is linked to.

Overdraft Fees Lawsuit Information

Lawyers are currently conducting investigations into the overdraft fees of banks. If you have paid excessive overdraft fees to a financial institution such as Nordstrom Bank, you may be eligible to join a class action lawsuit investigation to seek legal compensation.

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