Chances are good you have a debit card. If so, you’ve gotten your letter within the mail from you bank politely asking if you would like to continue enjoying its debit card overdraft coverage. Banks have been forced to ask you this because of new credit card rules, that make banks give you the option of saying “no thanks”. The change in regulations was encouraged by consumer complaints about out of control bank overdraft fees . Before you make your choice, keep in mind the only reason banks are trying so hard to convince you to keep debit card overdraft coverage is because they make big money charging overdraft coverage fees.
The scam of debit card overdraft coverage
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. Your checking account supplies the funds for your debit card. Overdraft coverage charges a debit card overdraft fee whenever you use the card and there isn’t really enough money left in the account to cover the purchase. That’s why that cup of coffee at Starbucks ended up costing you $ 40. Getting a payday loan if you are short on cash is smarter than letting your bank shake you down with debit card overdraft fees.
Bank of The US finds its conscience
Gelles said you need to decline your bank’s offer to extend overdraft protection. That’s’ such good advice, even Bank of The United States agrees with him. In March Bank of America announced that it will do away with debit card overdraft coverage. The New York Times reports that other banks could possibly be forced to do the same to compete for customers, even though the lost revenue will cost tens of millions of dollars a year.
Banks rob customers blind with overdraft fees
Debit card overdraft fees can very easily get out of hand as the offending transactions go unnoticed. Gelles said the Starbucks barista doesn’t say, “You know this is an overdraft, don’t you?” so when you get dinged once, you may get dinged over and over until you realize what’s going on. There are no legal limits to how numerous times you are able to get penalized. Wachovia will charge you for up to four overdrafts, or $ 140, a day. Citizens Bank, not quite as concerned about customer well being, will gladly pilfer $ 37 each for up to seven overdrafts a day: $ 259.
Avoiding bank overdraft fees
That too lots of people are lousy at balancing their checkbook is a problem highlighted by new credit card rules about bank overdraft fees. In a press release, Michael S. Kappas, President and CEO, Apprisen, offers tips for avoiding overdraft fees or the embarrassment of having a purchase declined:
1. Do not forget that an updated check register has a more accurate account balance than an ATM slip.
2.Stay on top of all deposits, receipts and withdrawals inside your check register.
3.Before you make a debit card purchase or cash machine withdrawal, check your balance.
4. Whether you write checks or not, balance your account once a month.
5. . Deposit a couple of hundred dollars and don’t record it with your register. Don’t forget to account for the ghost funds when you balance your account.
6. Make sure you are aware of the opportunities your bank provides for avoiding potential overdraft situations.
philly.com
nytimes.com
prweb.com
