If you have a debit or ATM card, it's likely you've received a letter encouraging you to opt-in to their overdraft service. For anyone who previously saw a $5.00 purchase turn into a $40 expense, it may seem strange that your bank would request your permission to participate in overdraft protection. The letter you received was prompted by a series of new federal overdraft rules that went into effect Sunday, August 15th. Included within these rules was a provision that requires a bank to receive permission to charge you fees for their overdraft service.
If you choose to participate in overdraft protection, your overdraft service will continue as it has in the past.
If you decline the bank's offer, your card will be declined when a debit or ATM transaction would overdraw your account, but you will not pay a fee.
For more information, check out this MSN article.
As always, continue checking on your personal finances frequently. You shouldn't depend on your bank to police your spending. Even though this new regulation will help you avoid unnecessary expenses, paying attention to your money will help you build good habits, and good habits will take you (and your wallet) far.
~Savvy Student
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