Bank of America announced that they will eliminate overdraft protection fees
for those who do not explicitly choose the option, effective June 2010 for new customers and August 2010 for current debit-card holders. What will happen is that a customer’s transaction will be denied at checkout if there is insufficient funds in their account instead of incurring a fee, usually around $30, for each overdraft occurrence. Compared to a payday loan which charges a one time fee for the loan term, overdraft fees can rack up a big tab in a very short period of time. To save oneself from unexpected “Card Denied” situations, we recommend that you keep tabs on your bank account to make sure that you have enough funds before checkout.
“Bank of America Junks Overdraft Fees….”
B of A won’t be the only one: this new law will cause many other banks to follow suit, however, implementation might be a challenge because of the software capability needed to adapt to individual preferences, according to some banking institutions. However, no system changes will be needed by Bank of America to make this transition. If you are concerned about overdraft protection and would like to opt out of Overdraft Protection now, Bank of America advises that you call the number on the back of your debit card or visit a branch to speak to a BofA associate.
The income derived from overdraft fees have “paid the bills” for many banking institutions, and now that they are going to get less of that, banks will have to create revenue elsewhere, like offering less free checking accounts, increasing loan interest rates, and charging more ATM fees. Although the overdraft fee legislation may save you some money here, there are still other ways that may cost you elsewhere.