Banks Push Consumers to Get Overdraft Protection
Opt in-at your own peril!
Due to the new CARD act protecting consumers from various abusive credit card and banking practices, banks have been struggling to find ways to replace lost income.
The most insidious of these efforts is focused on overdraft fees. And we’re not talking about the plain vanilla, traditional “bad-check” coverage, but the more damaging, and profitable, practice of debit card (and point of service) overdrafts.
And this isn’t small potatoes: we’re talking $20 billion per year in OD fee income alone!
Banks are now compelled to offer “opt in” to their cardholders, meaning that if your friend wants a $3 latte, even though he has just $2.99 in the bank, he will have to make written arrangements with his bank before hand.
Naturally, consumers are loathe to pay these fees, but many are even more reluctant to get turned down at the register. Stunningly, 93% of overdraft fees come from just 14% of people who exceed their balance 5 times per year! Come on people-let’s opt in-to some discipline and common sense!
As a result of the new regs, banks are absolutely slamming the airwaves and mailboxes with solicitations and provocations, all but threatening their card holders to opt-in. After all, they have a boatload of profit to protect-but is this good for the consumer?
No. Period. It is not. We suggest NOT opting in-and suggest also that debit card holders keep a closer eye on their card balances. Think of it this way: you wouldn’t lose track of the bills in your wallet-so think of your debit card the same way.
