From the category archives:

ING

ING Electric Orange - Overdraft Is Not “Spending Power”, It Is “Borrowing Power”

by golbguru on June 6, 2007

I had this on my mind ever since I activated my Electric Orange account at ING Direct. Whenever I log in to my account, it adds my overdraft line of credit to my available balance and happily displays the net result as “Spending Power”. Here is how it looks:

ING Electric Orange Overdraft Concept

Now, I am all for personal accountability and careful management of one’s own money (and I also love ING in spite of their no-good interest rates of late), but stuff like this sounds like irresponsible marketing, doesn’t it?

I don’t understand this glorification of overdraft privileges. The kind of overdraft that ING is offering, it is a *line of credit* and it should be treated that way - it’s almost like a virtual credit card (a little bit worse because there is no grace period) - you borrow and you pay for what you borrow (ING charges 12.25% as of today on the overdrawn amount). Now, you wouldn’t call a credit card’s credit limit as you *spending power*, would you? So why call a overdraft line of credit as “spending power”. Everybody knows what happens when you assume that a credit card’s credit limit reflects your spending power - DEBT happens (duh!).

Overdraft should be viewed as an emergency *protection* - protection against the odd goof up when your brain thinks you have more money in the bank than your actual balance. Accordingly, ING Direct may term it as “Goof up Margin” or “Emergency Cushion” or “Line of Credit” or “Borrowing Power” or “Margin for Occasional Stupidity” or whatever ..but please stop including it under “Spending Power”.

With that rant out of the way, let me mention here that, in spite of how ING (or other bank) glorifies (and/or encourages) overdraft facilities, it is up to the customers to use (or abuse) such facilities. So, although I dislike the fact that ING calls it’s overdraft line of credit as “spending power”, I would be skeptical of someone who says “I am in debt because ING told me that I have a large *spending power*”.

Some resources on the subject of overdraft fees:

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ING Direct Increases Savings Rate To 4.50%

by golbguru on November 29, 2006

ING Direct has announced an increase in the interest rate for its Orange Savings Account from 4.40% (APY) to 4.50%(APY). Saw this ad on their website today.

ingdirect

While the rate increase is not that exciting, I am hoping that this rate increase signals an increasing trend. A few years ago, when I opened my ING Direct account, it was offering the highest rate in the market and was aptly called the “leader”. Now, at least 30 banks offer more than what ING has to offer. At this rate it should be aptly called as the “lagger”. I really love ING for how they make things simple, but this is not helping!
Click here to check out what other banks are offering. Click on the “Search By 100 Highest Yields” option.

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