In the past week, I've received a letter and phone call from my bank letting me know about changes to its overdraft policy. You've probably received a similar letter or call (or will soon) because all banks are required to make these changes by July 1, 2010, for new accounts and August 15, 2010, for existing accounts. You need to pay attention to what your bank has to say.
New federal rules now require banks to get your permission before enrolling you in their overdraft-protection programs. If you don't opt in, banks can't charge you a fee if a debit-card transaction or ATM withdrawal would overdraw your account. What it also means is that your bank probably won't authorize these types of transactions if you don't have the money to cover them. In short, transaction denied.
However, the rules do not apply to payments made by check and automatic debit. So you'll still be hit with fees if you overdraw your account with these payments.
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If you want to keep your overdraft protection for ATM withdrawals and debit-card transactions, you need to follow the instructions in the letter your bank sends -- or call the bank to find out what you need to do. Your best option, of course, would be to watch your balance closely so you can avoid overdraft fees altogether. Here are three other ways to avoid overdraft fees.
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