Are Banks and Credit Unions Bottom Feeding on Debit Card Overdrafters?
Connie Prater asks via Taking Charge:
If you've had problems managing your debit cards in the past, racking up those $30 or $35 overdraft fees every time you overdrew your account, you might be getting a call from your bank or credit union in the next week or so. That is, if they haven't already called you.
A new study from the Center for Responsible Lending (CRL) raises the alarm that those who can least afford to pay overdraft fees are likely to be targeted by banks to sign up to pay, you guessed it, overdraft fees.
As of Aug. 15, 2010, current debit card users can no longer be charged overdraft fees unless they sign up (called "opting in") to an overdraft protection program. Overdraft programs allow you to spend more than you have in your account, but charge high fees for the privilege. Depending on how long the account remains overdrawn and how many times you overdraw, the fees can add up to a lot of money pretty quickly.
If you aren't already a fan, Taking Charge is great for tips on controlling your credit, being a smart debtor and keeping a grip on your FRNs. Highly recommended.