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Just Say No to Opt-In Overdraft Coverage

By: Hayden Antonio

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This summer there is going to be a change in the way that banks and credit card companies operate. The reason for this is because after all this 15 2010 you will actually have to opt in to overdraft protection from your bank.

In addition to this credit card companies will no longer be allowed to let you go over each your credit card limit without your permission. How does this work?

Well if you would like to have the ability to go over your spending limit on your credit card you will have to opt in to this arrangement. You will have to give your credit card company permission to let you go over your credit card limit. The same goes for your bank. You will have to opt in to overdraft protection.

Your overdraft protection will actually be discontinued unless you give direct permission to your bank to continue providing you with this type of protection.

However, the banks don't look at this as a big favor. Why? Because last year in 2009 banks earned a whopping $20 billion from overdraft coverage. These fees were as a result of using your debit card or your ATM card for purchases. When you did not have enough money in your account to pay for the transaction your bank paid for you. Remember, these fees can add up very quickly and the amount of the fee differs from bank to bank but it can be as high as $35 per charge.

And if $20 billion was not enough easy profits for the banks, they earned an additional $12 billion due to helping customers out when they wrote the check and did not have enough money in their checking account to cover it. That is an incredible amount of money being mercilessly drained from our checking accounts. And the banks are not going to give up on this big fat financial golden goose that easily.

The way many banks are trying to present this new law is that it actually going to create problems for their customers. After all without overdraft protection you could be stuck somewhere out in the desert without any money to help you get to the next watering hole .. Truly it's going to be tough for them to try and convince us to take the time to opt in to overdraft protection. Some of these tactics they will try to use involve trying to scare you into believing that if you don't have overdraft protection my goodness you're going to get yourself in trouble and you won't be able to handle that problem because you won't have overdraft.

$32 billion is a huge incentive for the banks to try all kinds of reasoning on us in order to get us to opt in to letting them charge is outrageous fees when we forget how much we have in our bank accounts and spend more than we have.

Okay, it's time to grow up and pay attention to our checking account. Stop spending money we don't have. Be responsible and only by what we need only don't have the money to buy what we want. And if you don't opt in to overdraft coverage you won't have to worry about spending more than you have in your account.

Article Source: http://depositarticles.com/

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