The Federal Reserve needs your help. You can help resolve a problem concerning your checking account. If you have a checking account then there is a good chance that you have a debit card and I’ll bet you use it on a regular basis. Let me explain how this process works. When you go and use your debit card, obviously the money is pulled right out of your checking account, but if you miscalculated your balance and you over draw your account any purchases you attempt at that point will still go through.
Your bank says it’s done as a courtesy to you, unfortunately every time one of those purchases go through and you don’t have the money in your checking account you are charged a fee of $35 per transaction. This is not done as a courtesy for you actually it’s done as a way for the bank to generate more money on your transactions.
Those fees add up. Just ask Anita Jackson per NBC4 news she was charged $457 from a combination of overdraft fees as well as other fees. Kip Watson was charged $387 in overdraft fees when he deposited his payroll check and starting writing out checks to pay his debts. Unfortunately his payroll check would not clear until the following Monday therefore all of the items he wrote checks against were returned for non sufficient funds and a fee of $35 was accessed for each returned item.
They surveyed a number of people regarding this practice and the vast majority indicated they would like to be rejected or denied for a purchase if there is not enough money in their checking account to cover a purchase. There is no sense in letting the charge go through if you are going to be accessed a fee of $35 on top of the cost of your purchase.
The Federal Reserve would like to hear from you regarding your comments and suggestions regarding the best way to resolve this issue. They also want to know what problems you may have encountered with overdraft fees. What can be done to make this system work better? If you would like to offer comments or suggestions send an email to Regs.comments@Federalreserve.gov. All of this information will be compiled to see if this process can be reformed and make it more customer friendly. No one wants to be charged with those excessive overdraft fees.
Now you can apply for an overdraft account but you have to get approved just like you would with any other credit product. Also if you end up using your overdraft account you could be charged an annual fee of $20 not to mention the money that is pulled from that line of credit to cover your overdraft charges is normally subject to a high rate of interest, somewhere in the area of 18% to 19%.
Source: NBC4 News Washington