New Bank Rules Aim to End the 'Overdraft Surprise'
Your bank can now no longer automatically sign you up for overdraft protection (and its associated fees) -- it's now up to you to make that decision.
KYW's Lynne Adkins reports that under the new federal rule (see related story) you must "opt in" for overdraft protection for your ATM or debit card. So if you don't tell your bank you want it, you'll be turned down at the point of sale when you try to spend more than you have in the account.
That may mean you won't get the cup of coffee you wanted. But it will also mean you won't unwittingly end up paying $35 for a cup of coffee (with the overdraft fee that was automatically charged by the bank).
Carol Kaplan, a spokeswoman for the American Bankers Association, says it's a great way for consumers to decide what services they want:
"There are alternatives. You can link your checking account to a savings account, so if your checking account becomes overdrawn, the funds would come out of the savings account. And that's one way to avoid paying overdraft fees."
She says even though the overdraft fee is only paid when you need the service, some people don't want to be allowed to spend more than they have.
(Photo illustration above by KYW's Mike Dougherty. Home page illustration by KYW's Ed Fischer)
