Know the facts to help you stay in control
(ARA) - There are new regulations going into effect this summer that could change the way your bank charges overdraft fees for debit card purchases. Are you ready? Officials hope the changes will help consumers avoid unexpected fees, but even after the new government rules go into effect on July 1, many banks will continue to charge a fee if you opt in to their overdraft service. It’s important to know how these changes might affect you and your money.
A recent Harris Poll survey reports that many consumers are lukewarm about overdraft services that allow them - for a fee - to make a purchase with a debit card or withdraw money at the ATM when they don’t have sufficient funds in their checking account. In response, some banks, like Bank of America, are going one step further than what regulations require and will eliminate overdraft fees for everyday debit card transactions by no longer authorizing those types of transactions if a customer does not have enough money in their account at the time. That means if customers don’t have enough money in their accounts at the time, their transactions will be declined and they won’t be charged an overdraft fee.
“Our customers have been clear that they want to know if a purchase is going to overdraw their account,” says David Owen, payments and products executive from Bank of America. “Our solution is simple, clear, and helps customers control their finances by reducing the possibility of over-extending themselves with a debit card.”
Do you think big overdraft fees are a fact of life when you need cash on the spot? Think again. Find out if your bank will link your checking account to another account, such as your savings account, credit card or line of credit. Bank of America says for customers enrolled in its overdraft protection program, the bank will automatically transfer available funds from a linked account to the checking account if and when they’re needed to cover an overdraft. When linked to a savings account the typical cost is $10 for each day it is used, no matter how often funds are needed. That’s a big difference compared to the $35 per purchase fee some banks will charge if you opt in to their overdraft service.
But what happens if you’re at the ATM and need cash? You won’t necessarily be declined if you don’t have enough money in your account. While many banks don’t offer this service at the ATM, starting this fall Bank of America will alert their customers when a withdrawal may overdraw the account at one of their ATMs. Customers may still get cash after they acknowledge and accept an overdraft fee.
In the past, consumers have worried that if they’re on the go, they’ll have to guess if their account balance is low. Today, many banks offer mobile money management tools that can help. Find out if your bank offers mobile banking, online banking, or text banking options so you can quickly check your account balances anywhere - in your office, at the airport, and even while traveling overseas. With a few clicks, you’ll know if you’re in danger of overdrawing your account. This is especially useful if you have several family members sharing a joint account. With some banks, mobile banking and online banking allow you to transfer funds so you can put money into your account before you overdraw it.
While you may or may not have paid an overdraft fee before, knowing what changes your bank is making will help you better manage your accounts and keep your finances under control. For more information about money management, savings, and planning for retirement, visit www.bankofamerica.com/solutions.
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