Wednesday, August 18, 2010

Money Money Money and how you can keep from losing it to overdraft fees

Over the weekend, a new regulation (Regulation E) went into effect that prohibits banks from automatically allowing you to overdraw your accounts using ATM withdrawls, and swiping your debit card for a purchase. Instead, if you try to take out money that is not in your account, or pay for a purchase that puts you over the limit of your funds your card is simply denied. Paper checks and automatic bill payments will still be pushed through even if it takes your balance below zero for a fee. But as of Monday, August 16th, banks can no longer include overdraft fees as an automatic feature of new accounts.

If you check your online banking regularly, or have taken out money from an ATM recently, you probably already know this, since banks have been trying to recruit members to keep overdraft protection, or sign up for it before the new regulation went into place. Overdraft fees are a huge source of income for banks, and they don’t want to take out the automatic card approval feature where you can have a negative balance from a purchase and not even realize it until you check your statements. Yippee!

I, for one, hate over draft fees (who doesn’t?), and would much rather be warned if I don’t have the money there immediately by a declined card on the spot. Once I ran up over a hundred bucks in fees from accidentally swiping a card for an account I don’t use often and dropping only 35 cents into negative territory. The decline of the card would have made me stop and realize that I took out the wrong debit, and switch to another, saving me a ton of money.

But, for those of you who want to avoid embarrassing declined cards, or have a habit of not tracking your finances closely, banks will still offer overdraft protection if you read a document and agree to the terms. Check out this article to read all about it.


FunnyFaceBeauty said...

If you get a chance, please check out my dare you to wear challenge. I am challenging my subscribers to recreate a look from the derek lam fashion show (pics on my blog). I will be doing an updated post showing what everyone came up with.
I am also currently having my August giveaway.

Carrie said...

hmm, this is really interesting. i don't have a debit card. Just an atm. But i don't really use it. haha. But i'll definitely keep an eye on this.

i am now your newest follower. Come and check out my blog. and follow me too? thank you!



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