You’ve a debit card, if you are like many people. So you’ve already received a letter from your bank about what service debit card overdraft coverage is, and just how essential it is for you to keep it. Banks are forced to ask you this because of new credit card rules, that make banks give you the option of saying “no thanks”. Out of control bank overdraft fees generated enough consumer complaints to get the Federal Reserve to change the rules . If you haven’t already decided, bear in mind the only reason you got that letter is because banks make serious money charging penalties for that service.
Debit card overdraft coverage is not because they care
Jeff Gelles at the Philadelphia Inquirer reports that when debit cards came into fashion, banks saw a new way to steal from their customers by confusing them about the nature of debit and credit cards. Debit cards draw on money as part of your checking account. Overdraft coverage charges a debit card overdraft fee when you use the card and there isn’t really enough money left within the account to cover the purchase. That’s why that cup of coffee at Starbucks ended up costing you $ 40. If you’re short of cash, it makes more sense to get a payday loans than to let your bank rip you off with debit card overdraft fees.
Big bank pulls overdraft fees—could others follow
Gelles said you need to decline your bank’s offer to extend overdraft protection. That’s’ such good advice, even Bank of America agrees with him. In March Bank of The United States announced that it will do away with debit card overdraft coverage. The New York Times reports that lost revenue from debit card overdraft fees could cost B of A tens of millions a year and other banks could feel the pressure to follow suit.
Bank overdraft fees can steal you blind
Debit card overdraft fees can effortlessly get out of hand since the offending transactions go unnoticed. Gelles said the Starbucks barista doesn’t say, “You know this is an overdraft, do not you?” so when you get dinged once, you may get dinged again and again until you realize what’s going on. No law limits the bank to how numerous times it can pick your pocket. Up to four overdrafts a day, or $ 140, is Wachovia’s policy. Citizens Bank, not quite as concerned about customer well being, will gladly pilfer $ 37 each for up to seven overdrafts a day: $ 259.
How to keep from getting robbed by your bank
That too many people are lousy at balancing their checkbook is a problem highlighted by new credit card rules about bank overdraft fees. In a press release, tips for avoiding overdraft fees or the unpleasant experience of having a purchase declined are offered by Michael S. Kappas, President and CEO of Apprisen:
1. Be aware that your check register is more reliable than an ATM slip for account balance.
2.Stay on top of all deposits, receipts and withdrawals with your check register.
3.Know your checking account balance before you make a debit card purchase or ATM withdrawal.
4. At least once a month balance your account.
5. Deposit “ghost” money as part of your checking account. Put a few extra hundred dollars within the account and keep it off the books. Don’t forget to account for the ghost funds whenever you balance your account.
6. Talk to your bank representative about your opportunities for avoiding all potential overdraft situations.
philly.com
nytimes.com
prweb.com
