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NEW YORK — Bank of America customers will soon be unable to spend more than they have in the accounts linked to their debit cards. It's a step that may become a common move ahead of new regulations limiting overdraft fees.
Rules set by the Federal Reserve that will ban banks from charging such fees, without first getting permission from the customer, are set to take effect July 1.
But Bank of America is going a step further than the regulations require. It will simply no longer allow debit card purchases to go through if there isn't enough money in the account.
For ATM transactions, customers who try to withdraw more than their balance will have to agree to pay a $35 overdraft fee before they can get the money.
"The majority of our customers who overdraw their account do so with everyday debit purchases," said Susan Faulkner, senior vice president of consumer banking for Charlotte, N.C.-based Bank of America. "They're doing this unknowingly, because they aren't aware that they are about to overdraft."
Since the bank doesn't have the ability to notify the customer when they're at the register and give them the chance to agree to a fee, it will simply reject such transactions.
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Is this good news? I guess from one point of view it is. I don't believe a bank should allow you to charge your debit card if you don't have enough funds on the account and then bring you in more trouble by charging high fees, which that person probable can't afford to pay back....
On the other hand will BoA start to collect money from the good clients to cover the loses on the over draft fees...that would be bad news!
Well it's about friggin time!! This is the way it was originally! And people need to write down every friggin' thing they buy in their check register or in a spreadsheet and check it everyday!!
Well it's about friggin time!! This is the way it was originally!
Wait until people realize that they're going to get rejected at the cash register - they'll be complaining even louder than when they were getting charged for spending more than they had in their account.
If someone has a debit purchase declined because of insufficient funds they are not balancing their checking account properly and probably should close the account pronto.
Well it's about friggin time!! This is the way it was originally! And people need to write down every friggin' thing they buy in their check register or in a spreadsheet and check it everyday!!
Thank God! I guess thousands of customers protesting their practices finally got to them.
Wait until people realize that they're going to get rejected at the cash register - they'll be complaining even louder than when they were getting charged for spending more than they had in their account.
That's much better than waking up and finding out you've been charged 5 NSF fees for purchases of less than 5 dollars.
That's much better than waking up and finding out you've been charged 5 NSF fees for purchases of less than 5 dollars.
I agree 100%, but I guarentee you that most of the people who complain about the 5 NSF fees KNEW they were overdrafting. They just got used to being able to spend more than they had, and they used the excessive NSF fees as a convenient excuse to blame the bank for their poor money management.
I don't care what anyone says, banks don't just spring these charges on the unsuspecting innocent citizen for walking through their parking lot. It's the customers actions that triggers these fees, and if the customer doesn't know how to manage their checkbook balance to avoid getting whacked with these fees, then they shouldn't have a debit card to begin with. An overdraft fee is exactly the same thing as bouncing a check used to be, and everyone knows the rules when they open the account. If they don't, than you would think that they would learn really fast after the first time they get clobbered with overdraft fees, right? If they continue to do it week in and week out, that's 100% on them. If you knowingly overdraw your account, then you are, in effect, taking a loan from the bank, and short term loans carry very high interest rates. Go check out one of those payday loan outfits - VERY HIGH. People who continually whine about the fees that result from THEIR OWN behavior should just be embarrassed beyond belief, because, admit it or not, we all KNOW what triggers these fees. Do you blame your dog for messing in your back yard? No, that's just what dogs do. Don't blame the banks either, they're just doing what greedy old banks do.
Bottom line - quit blaming everyone else, balance your checkbook and live within your means.
I agree 100%, but I guarentee you that most of the people who complain about the 5 NSF fees KNEW they were overdrafting. They just got used to being able to spend more than they had, and they used the excessive NSF fees as a convenient excuse to blame the bank for their poor money management.
I don't care what anyone says, banks don't just spring these charges on the unsuspecting innocent citizen for walking through their parking lot. It's the customers actions that triggers these fees, and if the customer doesn't know how to manage their checkbook balance to avoid getting whacked with these fees, then they shouldn't have a debit card to begin with. An overdraft fee is exactly the same thing as bouncing a check used to be, and everyone knows the rules when they open the account. If they don't, than you would think that they would learn really fast after the first time they get clobbered with overdraft fees, right? If they continue to do it week in and week out, that's 100% on them. If you knowingly overdraw your account, then you are, in effect, taking a loan from the bank, and short term loans carry very high interest rates. Go check out one of those payday loan outfits - VERY HIGH. People who continually whine about the fees that result from THEIR OWN behavior should just be embarrassed beyond belief, because, admit it or not, we all KNOW what triggers these fees. Do you blame your dog for messing in your back yard? No, that's just what dogs do. Don't blame the banks either, they're just doing what greedy old banks do.
Bottom line - quit blaming everyone else, balance your checkbook and live within your means.
I agree with most of your post but there is also another side to this.
Some businesses take a very long time until they deposit your check, and if it takes weeks before it is taken out, some people might have forgotten about the check and thought it was taken out of their account. I know they should know but it is just human to forget. If that same person goes to Walmart and let's say CVS and buys some cheap stuff with their debit card and that bigger forgotten check is all of a sudden taken out at the same time, the person can be slammed with 2 or 3 overdraft fees instead of 1 for the bigger amount, since banks claimed they first pay the higher amount and then charge for the lower amounts. If they did it the other way around it would be 1 over draft fee, which would be way more reasonable since the person made a mistake.
I had once 3 overdraft fees since a person told a company he had permission to charge our account and I only found out when my debit card was denied for theme park tickets...before that I had bought 2 donuts for less than $ 1.00, had gotten gas and bought something else. I got 3 overdraft fees. At the time I had to pay $ 19.00 for the $ 1.00 donuts which is crazy.
In the end I got all the overdraft fees back into my account since I had proof that person didn't have permission (we didn't press charges, since he was our kids manager and over stepped his bounderies by given permission to get the amount out of the wrong account), and the bank manager knew the situation...That saved us almost $ 60.00 in overdraft fees. That is how I learned there were overdraft fees. Where I'm from, if you have no money in your checking account the sale or withdrawal is denied, and I rather had that then the stupid excuse the bank gave me "we don't want you to be emberassed at the cash register..."
While I agree with a lot of what has been said here...if you try to use a credit card that is close to the limit and your purchase would put you over you will be denied. The banks took it upon themselves to say "well no one wants to be denied while standing at the register" and treating all debit charges that way and thus approving them even when the money wasn't available. In my mind's view this is the banks fault for not owning up to how it should have been handled and thus increasing their profit margins. People forget all the time about items outstanding; spouse's oftentimes forget to give the other a receipt and before you know it you are overdrawn. The banks did it this way only so that they would make money in the process and its about time they corrected it.
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