Karate Club Membership that Requires a Bank Account

Question

My kid is joining Karate Club and they want payment in the form of auto withdrawal from a bank account. I asked if they accept check or cash and they said no. They use some third party service to perform the transaction from the bank account. The karate program is 1 year long but they charge month to month.

I am not comfortable giving my bank information to them or to anyone. So I am thinking what if I create a separate bank account with only enough funds to cover karate expenses month to month. This means they won't be able to charge every month if my kid decides that he/she has lost interest.

What do you think?

What happens if they try to charge the new account even after I cancel the membership and the account does not have any funds?

Answer 1

I'd suggest checking whether there are other martial arts schools/classes in the area. They may be more reasonable. For example, When I was a kid there was a good Judo dojo at my local Y.

A separate account is not an unreasonable precaution. Of course it would be up to you to maintain sufficient balance and/or deal with any charges that bounced.

On the other hand: Check with your bank. You are generally not responsible for unauthorized charges against your account, and the bank knows exactly who to demand the money back from since they would know who it was transferred to. This may be as secure as a check, and may not put you at any more risk of fees/penalties. The bank can give you an authoritative answer on how they handle this sort of transaction.

And remember that any check you write carries your bank's identity, your account number, your name, and often your address. If that's all they are asking for you haven't really increased the attack surface

(Though for electronic transfer my preference is to get the other party's account information and have my bank push payments to them rather than letting them pull, to keep the transaction under my direct control.)