Overdraft Fees are Going Away

What took so long?

Has anyone heard, that starting this August, if you try to use your debit card to make a purchase without having the funds in your linked checking account, that purchase will be declined right in the store?

From what I have found, banks will no longer be able to approve the transaction and then hit you with a $35 overdraft fee -- unless you decide that you want to be able to charge without having the funds, and opt in – signing on the dotted line that you want this protection.

Keep in mind that for the banks, these $35 fees add up to $20 billion in annual revenue. That's why The New York Times reported, that your bank is going to try to convince you to join a new group. The banks are going to try to raise your level of fear, using words like "protection," and "emergency," and sending letters like the one from Chase quoted in the Times story, which read:

"Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you. If you don't contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 -- even in an emergency."

Don’t give in. Some of you may not have a problem with this at all, but for someone who was unemployed for almost a year, I do. Either way, don’t do it. Fees like this can sometimes be more than your purchase and are outrageous. With online banking, you should be able to keep close enough tabs on the money in your account that you don't overdraw. I go into my online account everyday now and haven’t bounced a check in over a year. Yes, that is a good thing for me.