Adios, Overdraft Fees! (Well, Kinda)

Ever have $ 24.82 in your account and you write a check for $25.00?  Yes, the proverbial writing checks your …bank account… can’t cash.  That was me in college. 

Not on purpose of course! 

I was usually just hoping/wishing/praying that my paycheck would beat the check I had just written to the bank.  That didn’t work out so well. 

That 18 cents was compounded by an overdraft fee of $20…usually minutes before my paycheck made its final lap to the bank. 

Though it taught me valuable lessons, overdraft fees only seem to get you deeper and deeper in the hole. 

It is like falling dominoes toward financial hell. 

Learn from someone else’s mistakes, not your own.  And check out the new rules from the Federal Reserve (effective August 15, 2010) designed to empower consumers and help you can avoid overdraft fees:

• You choose. In the past, some banks automatically enrolled you in their standard overdraft practices for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply its standard overdraft practices to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).
• Existing accounts. If you do not opt in (agree), beginning August 15, 2010, your bank’s standard overdraft practices won’t apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don’t have enough money in your account, but you will not be charged overdraft fees.
  New accounts. If you open a new account on or after July 1, 2010, your bank cannot charge you overdraft fees for everyday debit card and ATM transactions unless you opt in. If you open a new account before July 1, 2010, your bank will treat you as an existing account holder: you will receive a notice about your bank’s standard overdraft practices and will have to decide if you want them for everyday debit card and ATM transactions.
• Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.
• Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities. Your bank may still automatically enroll you in their standard overdraft practices for these types of transactions. If you do not want your bank’s standard overdraft practices in these instances, talk to your bank; you may or may not have the option to cancel.

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