A new law was recently passed that I am a huge fan of. Now on your bank accounts, you will be able to choose to opt in or opt out of debit transactions that might potentially make your account go negative. For example, if you had opted out and you went to buy a cup of coffee and you only had $1 in the bank and the coffee was $3, the debit would be declined on the spot. You would not get your coffee. This is great news because that cup of coffee could of turned into a $39 drink!
According to the article I read here, everyone should automatically be opted out. However, you might want to check with your local bank to make sure.
Also if you do ever incur NSF fees, always be polite and ask them to waive them. In the past, they have always been willing to waive one or two of mine. (Thankfully it has been a VERY long time since I went negative in my account.) Also, most banks now allow you to link accounts together. I have all my accounts linked to one another, so if something was to happen it will pull a balance from the other account (a $7.50 charge each time), but it avoids the risk of being overdrawn.
Be sure to catch up on all the previous Let’s Save Some Money posts.
Mendy says
The one downside to this new law is if you deposit money (either directly or by direct deposit) and it doesn’t post that day (i.e. you deposit it after your banks cut off time) and you try to use your card, you will be denied. Even though you have the money in the bank, since it hasn’t officially deposited yet, your card will be denied.
RK says
I believe overdraft protection has always been optional, at most banks, anyway. It’s just that some banks automatically enrolled customers in it. I “bank” with a credit union, and I am aware of all of their services and only am enrolled in the ones I want. If I were to find that I was unknowingly enrolled in overdraft protection, then law or no law, I would — politely, of course — explain that I had no idea I had overdraft protection and do not wish to have it. I would expect the bank to fix the problem or I would go to another bank.
I agree with the advice you have given in your post 100%, Kristin, but I have to disagree with loving the law. I don’t believe government should be passing laws forcing companies to do what we want … *we* should get the companies to do what we want ourselves … by refusing to do business with a company that does not. Why does the Five a Day work so well? Because companies really do want to please customers … we give them our money, after all. :-)
Leigh Anne says
RK, the reason the government has to pass these laws is because the banks have become predatory. They sneak things by on purpose. They spend billions lobbying. It would be practically impossible for groups of people to influence huge companies such as Wells Fargo, Chase and Citibank.
Liz says
And then there’s the law of unintended consquences. Do you think banks will be content losing this revenue stream? Of course not, they’ll find ways to make it up. Perhaps the days the free checking will be history. In the end we’re all going to pay due to this regulation. What ever happen to self accountability? I agree with RK, there’s nothing to love about this.
RK says
Very true. It’s easy to pass a new law to “right a wrong”, but legislators seldom think through the side effects. Case in point: The sugar tariff, which was designed to help the sugar industry, hurt the candy industry. I’m very concerned about the new regulations put on credit card companies which may make life easier for those who have large debts or are frequently late, but will most likely make things harder for the rest of us.
Oh well. I will stop now. I could not help but put in my two … OK, maybe more than two … cents. But this is a frugal blog, not a political discussion blog, and I don’t want to overtake Kristin’s money-saving tip with a big political debate. So I’ll stop making comments now. It was fun! :-)
RK says
Hi, Leigh Anne. I understand what you are saying … I agree that we have a big problem. I just disagree about the solution. If a large number of customers were to walk out, you can bet those large companies would pay attention. The problem, as I see it, is that people don’t want to walk out. They want to continue receiving the benefits of the banks while the government takes care of the bad stuff. Why not just walk out?
Amanda says
My bank offered us the option of overdraft protection. I definitely chose to not let my account get overdrawn. I have lost literally hundreds of dollars over the years making a mistake and going over in my account by a few dollars. While I know it is my responsibility to keep my account in good standing, I also know mistakes are made. I also think banks are crooks and take advantage of people. Seriously, who are the people that will overdraw their account, the people struggling to make it in the first place. I also didn’t like how my bank made it sound like they were doing me a favor by paying the fees associated with my account when it goes over. They don’t pay those, I do!
Liz says
So banks should just cover “mistakes” in the hopes you’ll make a deposit to cover the overdraft? In other words, free unsecured loans?
Amanda says
No but I do believe that when I go over my means by $1.00 and get charged $35.00 it should be illegal. I also think it isn’t right that if I have $50.00 in my account and several small transactions and one $55.00 transaction magically the large transaction goes through first that way they can charge me overdraft on every single other charge. Nor do I think it’s right that if I deposit money into my account that I should be charged overdraft on transactions if the deposit is still pending. If the deposit was denied for some reason then I could understand overdraft fees. To me, banks are greedy, greedy, greedy.
Michellyn says
I actually like just using credit cards every month and paying off the balance. Not only do you get rebate/rewards, but if someone was to get my card info they wouldn’t be able to take money out of my bank account. You have to be disciplined to do it though & know what your budget is…
Ida says
This topic comes just at the right time for me, I was left a little confused yesterday when I activated my daughters new checking/debt account. I wasn’t aware of any new law. The automated call didn’t gave a good description of the options. So I opted out, thanks for this topic it confirmed what I was thinking it was. My daughter just went off to college and I don’t need her over drafting, because you know who will end up paying. She has never had a checking account before so I am very nervous about her keeping track, this will be a good lesson for her. When she needs money I can just transfer from my account to hers but she will need to keep track.
Amanda S. says
I have Chase as well, and they sent an email saying I had to Opt In to the overdraft protection. I did because I am a single mom of 2 and even though I know there is a good amout in my account at all times, I never know what may happen. I think my worst fear has always been being out of town somewhere and may car breaks down or some other crazy thing like that and if it comes down to being overdrawn or not getting home, Chase will get paid back eventually but my babies being safe comes first. But an emergency situation like that would be the only time it would ever come in to play Thank God. :)
Liz says
I have never received a legit email from Chase, although I’ve received many, many that were not legit. As a precaution please call Chase to verify they did indeed send you the email.
RK says
When I was with Bank of America, and now that I’m with a credit union, I do receive e-mails, but only if I’ve signed up for them. It’s obvious to me whether the e-mail is real or not because I understand how to read e-mail headers (and it’s also fairly clear from the content of the e-mail in most cases, but that’s less reliable), but if you are not 100% sure, I agree it’s best to check with the bank.
Amanda S. says
Liz,
Good point about that! But this one was legit. It didn’t have any links to click or anything, it just explained what the overdraft protection was about and if I wanted to sign up I had to go to the website myself and sign up. I get those types of emails all the time from USAA Bank and Citibank but I don’t have an account with either of them so I know they are spam. I really feel sorry for people who create and send those emails because they are too sorry to get a real job an live off of scamming others out of their hard earned money. :(
Clisty says
I bank with Chase and I really hope that this will actually happen. I need to ask about how it works with check holds when you make debit transactions and the funds haven’t cleared yet.
Anyway…Chase will let you get about three NSFs refunded every 12 calendar months.
I really do feel that it I’d sneaky how they will let transactions go thru when funds are not there and then
Charge exorbitant amounts when they shouldve refused the transaction to begin with.
Leigh Anne says
Just so you know, Chase is one of the big banks who are refusing to change their policies. Especially, the order in which they process transactions. Always the days largest first.
Jennifer says
Kristin, I like how you said to be polite when asking for fees back. I work for a bank and if someone comes in and says, I don’t know what happened (or even if they say they do know what happened) and they are nice, and respectful, I will do everything I can to get my manager to approve a refund. But, if they come in yelling and demanding, and telling me it is my fault and the bank is stupid and so forth and so forth, I make sure to tell my manager about their behavior. I know it is upsetting and scary when people overdraw, but manners go a long way.
Tara says
I really do like this new feature, when DH was deployed we had set up a 2nd checking account for him, he didn’t need much so I would put only $50 every 2 weeks into his account. I noticed one day while checking his account it was overdrawn. Turns out there was a foreign transaction fee (though the military only allows the member to us one option while paying for things downrange and it’s through some silly debit card called Eagle Cash). This transaction fee was apparently just started a few months after he got there and we had no clue about it and that .35 cent caused us to go over on that account. When I called the bank that we had been a member of for a very long time and it’s military endorsed they were unsympathetic and refused to take off the overdrawn fee. Needless to say I was annoyed as we had never overdrawn before and also have our insurance and at one time a credit card with them (it was paid off and again never paid late on). Hmm maybe I should find another banking service after hearing that some banks will take away the charge.
Leigh Anne says
Ok, I’m soooo confused! Here is my nightmare that happened today at my bank. I wrote a friend a check for $100 and told her not to put it in the bank until today. Communication was lost somewhere, somehow and she put it in the bank last night. Unfortunately, that caused my bank account to be overdrawn and caused $330 in overdrafts fees for every transaction before it all the way to my last real time balance. Those transactions were mainly below $5, I think maybe 2-3 were up to $10. By this new law, should they have denied that $100 check so that my account would not have been overdrawn? They were only willing to give over turn $75 worth of overdraft fees.
I guess it goes without saying that I’ve cried a lot today…
Jennifer says
In reply to Leigh Anne, the new law only covers debit card transactions, not checks. I work for a bank, and at my bank, you can ask for the same “opt out” coverage on checks, but I am not sure if that is with all banks or not. All banks have to comply with the debit card opt in or opt out – it is a new regulation. I hope this helps some.
Leigh Anne says
The real problem here is that the only one that should have overdrafted is the $100 check. Everything before that should have been fine. But, banks are predatory in nature and they pay out the highest amount first instead of in chronological order. I’m going to talk to the bank and make sure I’m opted-out from now on. This was not due to any irresponsibility on my part.
Sherry says
Did you post date the check? If so, read below . . .
Post dating a check IS legal, but it does NOT prohibit the recipient from cashing it. Once you give a check to someone, it’s legal tender – even if dated for the future.
With that being said, any bank and/or credit union should not have accepted the check if brought in person. The teller should have caught the date on the check and rejected it.
However, if you put the real time date on the check and just asked her to hold it until today then unfortunately they can cash the check. Check to see if your bank has Courtesy Pay. If they do, you may want to opt-out so any check presented in person and the funds aren’t available would be returned to payee stating refer to maker.
Leigh Anne says
The check was actually written and dated way back on August 13th. She never deposited the check (she isn’t hurting for money obviously). So, last Thursday I wound going to the Dr and so did my daughter. Then I would up having to go back again. So 3 Dr. visits and 3 prescriptions later we asked her to go ahead and wait until this Tuesday to deposit since all that unexpected money came out. I guess she misunderstood and deposited Monday night and my husbands direct deposit check hit at midnight.