The Credit-Debit-Prepaid Card Message is Getting Messier – Part II

So if you’ve taken the time read to Part I, thanks for coming back for, what Paul Harvey used to say as, “….the rest of the story.”

Perhaps you’ve been reading some recent articles about how some of the major banks are reviewing their overdraft policies and fees.

For example, beginning Oct. 19, Bank of America will no longer charge its usual $35 overdraft fee if a customer's account is overdrawn by less than $10 in a single day. It will also limit the number of overdraft fees it charges to four a day, rather than the current 10. U.S. Bank will also waive fees if an account is overdrawn by less than $10 and will limit the number of overdraft charges to three a day. Wells Fargo and Chase will stop charging fees if an account is overdrawn by less than $5. Wells will limit its overdraft fees to four a day, while Chase will stop at three. All subsequent transactions for each bank will be denied.

BofA, Wells and U.S. Bank will allow customers to opt out of their automatic overdraft-protection programs, meaning that customers can choose to have transactions rejected at the cash register if there are insufficient funds in an account. Let’s see how teenagers like that option the next time they buy a quarter-pounder at Mickey D’s and their card is rejected.

I think card issuers should charge overdraft fees for those transactions that place the deposit account in a negative balance. The fee allows the transaction to go through and saves the customer the embarrassment of having the card REJECTED at the register. It’s the consequence of not knowing what’s in your checking account.

However, as noted in Part I, when a previous merchant places a hold on the debit transaction without your knowledge causing future transactions to place the checking account in a negative balance and hence accumulating overdraft charges, that’s another story.

Somewhere in this equation, the cardholder has to have some responsibility in all of this. So here’s a thought.

How about we all get in the habit each day that after checking our Facebook page, and the tweets we follow, how about checking the balance of your account each morning and review the transactions that cleared the night before? Online banking is no longer a luxury, it needs to become part of our daily routine in order for us to manage who charges what in this world of swipe and run