| Imagine having caused your account to overdraft by | | | | just get rejected. That is why it's a rude awakening |
| only 11 cents and yet you find out later that day that | | | | when they check their bank statement and see a |
| your bank has charged you a $34 fee to cover the | | | | charge there. |
| charge. Ouch! And yet, this type of thing literally | | | | The Good News |
| happens every day to millions of people. For some | | | | There is some good news in this area, however. For |
| folks, $34 isn't much money, but for most of us, we'd | | | | example, in response to government and consumer |
| rather not have to pay it as a fee to our bank, thank | | | | pressure, many large banks are changing their |
| you very much. | | | | overdraft policies to make them more |
| Overdraft fees have gone well beyond being just a | | | | customer-friendly. |
| penalty or slap on the wrist that a bank customer gets | | | | For example, some banks are now saying they will not |
| charged for not managing her checking account | | | | charge a fee unless the account is overdrawn by at |
| carefully enough. Rather, they have become a big | | | | least $5 (rather than just a few cents, as before). |
| source of revenue for banks in and of themselves - to | | | | Other banks are limiting the maximum number of |
| the tune of over $25 billion per year across all banks in | | | | charges you can incur in a given day. And, some |
| the U.S. alone. | | | | banks are also making their protection programs "opt |
| Many bank customers who try faithfully to manage | | | | in," which means that customers will be given a choice |
| their checking accounts each month do a pretty good | | | | about whether they want to join when they sign up for |
| job. And yet, there can be that one charge that puts | | | | a new account. |
| you over the edge by just a few dollars - and then | | | | The Alternative to Paying Overdraft Fees |
| come the fees. | | | | Of course, the best alternative to paying these fees is |
| The Bad News | | | | to find banks that do not charge overdraft fees at all. |
| The bad news about overdraft fees is that they are | | | | While most major banks continue to implement strict |
| set up to be "trigger happy": to make it as easy as | | | | overdraft policies, there is a new breed of banks that |
| possible for you to get charged a fee. For example, | | | | refuse to charge overdraft fees. These banks will |
| most banks with overdraft protection programs will | | | | actually cover an overdraft charge - say when a |
| allow a debit charge to go through, even when the | | | | customer uses a debit card or writes a check against |
| account is overdrawn. This causes a fee to be | | | | an account with a negative balance - and yet still not |
| charged to the account. | | | | charge an overdraft fee for the trouble. Cool stuff! |
| Another bad thing about overdraft programs is that | | | | You can find no-overdraft-fee banks online. Make sure |
| they have traditionally been opt-out. This means that | | | | to contact at least 3-5 of these banks before you |
| when you sign up for a new checking account, you | | | | make a decision on a particular bank: while they all |
| are automatically enrolled. Many people are unaware | | | | offer no-overdraft-fee checking, other details about |
| of this, so they figure that if they try to put through a | | | | each bank will of course vary. Choose the one that |
| charge that will overdraw their account, the charge will | | | | feels right to you. |