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Qualifying Debit Card Transactions

Thursday, June 16, 2011 - 2:26 PMFarmers & Merchants Bank - Details
My RCA account failed to qualify for the higher interest this last period. Two debit card transactions that I charged over the net at my Prescription service apparently arrived at the bank classified as ATM transactions. I would have thought that since I didn't use an ATM and the transactions were not multiples or $20, this shouldn't happen. But it did.

The bank rep told me that the mistake was not theirs and would not grant me any immediate relief. She did agree to forward this on the higher management for review and that they might grant me a pass. But, it's not certain.

This is the second time I've run into this. I had a similar issue a few weeks ago at Integrity Bank in Houston. Here, a debit incurred at NetFlix came in classified as a recurring charge and failed to pass the computer definition of a qualifying transaction. They were nice enough to override and grant me the higher interest rate.

Is this something any one else has encountered? How can one go about determining whether a transaction will qualify or not? Is there some way to avoid this issue?
3
elarhelarh36 posts since
Jun 9, 2011
Rep Points: 102
1. Thursday, June 16, 2011 - 3:02 PM
Just to follow up, the bank just issued me a credit for the remaining interest as a one time courtesy.
1
elarhelarh36 posts since
Jun 9, 2011
Rep Points: 102
2. Saturday, June 18, 2011 - 3:07 AM
It happened to me too two years ago (Farmers & Merchants bank and West Bank - both accounts are not active for me right now).  I believe the charges in question were AT&T online payments.  For some reason the charges were coded as ATM instead of debit card.  Anyways, Farmers & Merchants bank was nice enough to grand me one time courtesy.  But I wasn't that lucky with West Bank.  They refused to give me the pass, therefore I lost almost $200 of interest that month as the rate was 5% and the cap was $50k at the time.  Needless to say, i moved my $50k out of West Bank right after that.     
1
ninissniniss59 posts since
Sep 22, 2010
Rep Points: 153
3. Saturday, June 18, 2011 - 10:36 AM
Dish TV also codes debit card charges as ATM transactions. I discovered this when I found a $1 ATM fee when I checked my Power NOW Checking transactions at the Berkshire Bank online. I immediately called the Teaneck branch about the fee, and the branch manager traced it to the way the Dish TV charge was coded. The $1 fee was refunded and, as it was the middle of the cycle, I managed to complete the qualification requirements with other debit card transactions. Needless to say, I switched my automated monthly Dish TV payments back to a credit card.
1
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
4. Saturday, June 18, 2011 - 11:56 AM
Question for those who had their debit card purchase classified as an ATM debit instead of a purchase: Did you provide your PIN or was the card used without a PIN?

Seems like if you use your card without a PIN, it would have to be counted as a signature-based purchase over the VISA or M/C network. But I'm not 100% sure of this.

I've heard of a few cases in the past when a PayPal purchase was counted as an ATM debit instead of a debit card purchase. It would definitely be useful if we can understand this better to ensure no one misses a month of interest.
1
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
5. Saturday, June 18, 2011 - 4:01 PM
In my case, they were all non-pin purchases.  I paid my AT&T bill online using debit cards not any different from the way i used to pay it with my credit cards.  As of today it still is a mystery to me as who processed those transactions differently.  The bank told me it was AT&T who coded as ATM, but AT&T insisted that they didn't code differently so it must be the bank's coding.      
2
ninissniniss59 posts since
Sep 22, 2010
Rep Points: 153
6. Saturday, June 18, 2011 - 9:53 PM
It seems to me that all of these purchases being classified as ATM have something in common. That is, in actuality, they are all regularly recurring payments ... like the monthly NetFlix, AT&T, or DishTV charges. As a matter of fact, the rep at Integrity Bank called the non qualifying transaction from NetFlix a "recurring" charge. Another weird thing is that a second bank (ViewPoint) will consider my NetFlix payment as qualifying as a debit card transaction.
1
elarhelarh36 posts since
Jun 9, 2011
Rep Points: 102
7. Saturday, June 18, 2011 - 10:50 PM
I suspect it's AT&T which is coding things incorrectly, but my opinion is based only on what I have seen this week.  I recently started initiating multiple online one-time payments to AT&T to help meet my RCA requirements.  Prior to this, the account balance was paid through AutoPay billed to a credit card. 

What I have noticed this week is that AT&T is not consistent about how it processes debit card transactions using VISA and Mastercard debit/credit cards (at least as far as whether it offers the choice to process through specific networks, and maybe more).  There was an AT&T online system upgrade shortly before 6/15 (the system was unavailable for at least 24 hours prior to that date) which may have some bearing.  CSRs confirmed on 6/15 and 6/16 that there were a lot of problems with the new version. 

Following are my three datapoints: 

1.  On 6/15, when I used a VISA debit/credit card from "BANK A" to make a payment, the online system had "helpfully" pre-checked the option of processing through a couple of networks which I recognized would cause the transaction to process as a debit.   The other option presented (but not checked) was to process through the VISA/Mastercard network.  I "unchecked" the other-network option, effectively choosing to process through the VISA/Mastercard network.   AT&T confirmation of payment included the phrase "new credit card".  This is a new RCA for me, so I will have to check to see that the transaction qualifies to earn the reward rate.  At the bank it posted as DBT CRD 0430 06/16/11 xxxxxx ATTM*yyyyyyyyDLS 800-331-0500 TX  (x's and y's are personally identifiable information). 

2.  On 6/15, following the first transaction, I attempted to use a MasterCard debit/credit card from "BANK B" to make a one-time payment.  The system did not offer me the network choice so I did not proceed with the transaction.

3.  On 6/17, using a VISA debit/credit card from "BANK A" (associated with a second RCA account), again I "unchecked" the other-network option and went with VISA/Mastercard.  AT&T confirmation of payment again included the phrase "new credit card".  However, I noticed that this time the transaction posted at the bank as a series of 3 entries:  preauthorization, debit card settlement and clearing of preauthorization.    I don't know if this will be revised after the bank's processing after the weekend. 

I'll contact banks A and B to confirm that the transactions are included in the rewarded transaction count and if not, to determine the reason, and update early next week. 
2
pearlbrownpearlbrown1,436 posts since
Nov 2, 2010
Rep Points: 6,264
8. Sunday, June 19, 2011 - 12:40 AM
To Pearlbrown,

While i can't say for certain that it wasn't AT&T's coding issue, I know it's not related to their recent system upgrade as my problem (coded as ATM) occurred two years ago.  Probably i should clarify that the transactions in question were processed through debit card (meaning i did not uncheck the box to force it go through credit card network) and I have tried 6 or 7 different RCA debit cards to pay AT&T, all were fine except for 3 banks (farmers & merchants, west bank, and commercial bank & trust).  So if i want to pay AT&T using one of these 3 RCA debit cards, I have to make sure to uncheck the debit card box.  Bottom line, if you uncheck the default (debit card network) you are safe for any transactions, otherwise it's try and tell.  My reason of not always selecting the credit card payment network is rather silly - I feel guilty to split the bill (pay multipe times with multiple debit cards each month) so I try to save the merchant (AT&T in this case) money by choosing the debit card option (i thought credit card network option would cause merchant more to process).        
1
ninissniniss59 posts since
Sep 22, 2010
Rep Points: 153
9. Sunday, June 19, 2011 - 10:29 AM
Niniss, in my examples the AT&T upgrade is a complicating factor, of course since it's not clear if the difference is due to the system change or how the system has always processed VISA and MasterCard transactions differently in terms of offering a choice in networks or not.

One thing is certain, as the examples from Elarh, Wil and you demonstrate - meeting RCA requirements is not for the faint of heart   8-)   and we must be on our toes all the time.  We must count transactions, remember how to process them with different vendors and then check to see if there is anything amiss in how they post at the FI.   It's time consuming but IMO a small price to pay for the benefit of the higher rates for as long as they last.   

I am grateful to Ken (and other posters) for identifying great opportunities to keep my head above water for as long as possible.  I have a personal "rates drop to this and RCAs become irrelevant" threshold and fortunately am not there yet. 

BTW your reason for not selecting the credit card network (saving the vendor some $) is not silly at all.   My election of the credit card option is an automatic reflex - due to too many years of insisting I would never use debit cards because they do not offer the same consumer protection.    Of course circumstances change and what is not acceptable today may become so in the future. 
2
pearlbrownpearlbrown1,436 posts since
Nov 2, 2010
Rep Points: 6,264
10. Sunday, June 19, 2011 - 7:50 PM
When I paid Dish TV, I did NOT provide a PIN.
1
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,285
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