Debit Card Overdraft Protection-Will You Opt-In?

[LIFERBABE]

Opt out!! folks, the purpose of a debit card is to take the money out of your account. It is not meant to be used as a credit card.
The banks try to sell it like they are doing you a favor by saving you "embarrassment". they are not doing any favors at all.

Yeah, I have a credit card and could have used it to cover any purchases if my debit card declined. I was just trying to use my cash first, so I would not have so much to pay at the end of the month. Instead I had to pay all those fees!

For $35, I'll take the embarrassment. Who's embarrassed in this economy anyway! If I can use coupons, cut cable and phone bills, etc. why would I be embarrassed that I couldnt charge a Subway?

 

[tina_la]

Keep in mind even with opting out your card may still let charges go through sometimes with funds not being available. ex. over the weekend you use your card at multiple places and it looks like you have the funds to cover it but then a large check comes through Monday and the card charges will pend until Monday night. You will have charges then. So don't think even with the new plan that it will never let a charge come through (it is stated in small print that weekends and holidays they can't always tell about available funds). I rarely overdraft but will opt in because in the long run they will find a way to make this income back and prefer to have it in case of emergencies

 

[HeyIt'sMe]

We have our checking account at Chase and I opted out of the debit card overdraft protection. We don't use our debit card for purchases; the only thing we use it for is our ATM withdrawals.

 

[Cheshire Figment]

I opened a Chase Checking Account in January. It was a special offer where they gave me a $100 bonus to open the account. To keep no service charges I have to do at least five non-PIN debit card transactions per month, and I have to keep the account for at least six months.

I have made three deposits for a total of $201, and they have deposited an additional $100. My balance is currently $85.76.

After I receive my sixth monthly statement, in July, I will deposit a check from my real bank account to bring the balance to a multiple of $20 and then do an ATM withdrawal for the balance.

There is no way in the world I would accept their "overdraft protection" and will be happy to have accepted their gift of $100.00. (BTW, the $100 will be reported to IRS on a 1099-INT as Interest Income to me, so I will have to include it in my 2010 tax return.)

 

[arihillfarm]

I heard a Clark Howard show on this very thing. Please don't opt in. With the new law, debit cards are supposed to work like they should. If the money is not there, you can't use the card. If you opt it, the bank can let you overdraw several items and then promptly charge you $35.00+ for each of those overdrawn items. Clark said that banks were purposely not updating balances to catch people this way.

And I have to add that if the account owners were updating balances as they should, there would be nothing for the banks to catch.

My ex-fiance never kept a checking register and it drove me nuts. His solution to the "how much money do I have" question was to drive to the ATM and check his balance. Of course, he kept several thousand dollars in there as a cushion but most people can't do that or would rather put their excesses to better work for them than in a non-interest bearing checking account. Needless say, we kept separate checking accounts and one joint household account which I took over responsibility for.

-Astrid

 

[petlvr1064]

I learnded the hard way a couple weeks ago you can over draft debit cards. I only have a debit card no check book and was at the grocery store and do not keep a ledger only check my balence on line not the best way to do it but it works for me and my situation any way i had to buy two weeks worth of grories and was not quite sure how much mony i had i was on hold with wells fargo when the check out person said thers an atm over there so i went and check my balnece and it cost two dollers grr and that on top of grociers cost med to over draft luckly they reversed the fees but it was frustreting.

 

[Carl Fredricksen]

I used to try to opt out of this and the bank wouldn't let me.

Yea, I went to Huntington and they tried to hard sell me on the "benefits" of this, and it took me 5 minutes to tell them I manage my finances daily and don't need it. I have a bank and a CU that I deal with, and both were really shocked I wanted out of it.

Wow, just got my THIRD offer today! I feel sorry for the people who don't read what it means, and think this is actually a benefit!

Funny thing is, I even got an mailer from Chase even though my account with them has been closed for 4 months! They added the coverage to a non existent Debit Card and Account.

1 reason I started this thread is that the way Chase has worded it, they have put lipstick on the pig and made it seem like the government took away a benefit and now they are giving us all the option to get it back

Opt out!! folks, the purpose of a debit card is to take the money out of your account. It is not meant to be used as a credit card.
The banks try to sell it like they are doing you a favor by saving you "embarrassment". they are not doing any favors at all.

I asked the rep at my CU (they are the best! ) why they were doing this, and they said it was part of the financial reform act in February, that they Government was mandating that all banks provide this service. I assume it is so people who are working poor will get out of the check cashing places or something. When I told her I wanted to opt out her exact words were "If the Government has their way in the future, you may not have a choice"

So to me, it sounds like the Government put in a stop gap to protect people, and the banks are finding a way to turn it to their advantage IMO. As other as said, the last thing I need it the ability to accidentally have a transaction go through that shouldn't. If someone is cleaning out my account without me knowing, a declined transaction might be the best thing in the world!

 

[LIFERBABE]

personally would not rely on this coverage for emergencies. Chase can deny the purchase even if you opt in. They are going to minimize their risk and max their profit. The little small purchases will be allowed but larger ones will not go thru IMO.
I also don't mix my bill account with my debit card. My debit is for everyday transactions so opting out will eliminate any future fees on this account

 

[Mrs. Bradbury]

When I was younger, a single mom and less financially stable, I did overdraft on occasion and it was usually due to me thinking I had more money in the bank due to transactions not getting processed timely. I rarely use a debit or credit card anymore and operate only with cash, but it seemed to me that banks not only rearranged transactions so that it would be more profitable to them (larger transactions first, then charging overdraft fees for a bunch of smaller transactions) but they also didn't process transactions in a reasonable amount of time. Hopefully the new laws have taken care of that.

I would never opt-in to being able to overdraw my account and allow them to be able to charge ridiculous fees per transaction. It completely misses the point of a debit card.

 

[r&kmommy]

Optin in on the overdraft protection, as offered by Chase, is a fiscally UNSOUND choice to make. . . don't do it! I would much rather pay the one time "bounced check" fee or be declined at the register than pay the knee breaking loan shark fees they will charge for the "privilege" of their service. . .

 

[Planogirl]

I don't see anything inherently wrong with this if you control your spending and don't rely on this. I don't see it as different from what you already have if you watch your spending carefully. I don't understand how Chase can pick and choose which items to cover though and the fees are ridiculous.

 

[sksjasams]

Our credit union would not allow me to opt out of this "service" before, so I was very pleased to see the change in the law. I most definitely will NOT opt in. I had no idea I even had this "service" and never dreamed my debit card would allow me to continue spending money if their were none in the account. That doesn't even make sense.

 

[3_disprincesses]

I'm kind of late finding this thread but consumers may opt in or opt out at anytime. So there are some things I want to point out:

1 - The change is to actually "OptOut". Your debit card purchases have always been paid into the negative when funds were not available. There was never an option to the banks to not pay unless you went severly overdraft often and never kept a positive balance and at that point they could just shut down your card.

2 - If the majority of consumers "OptOut", we may not have "Free Checking" any longer. Banks were making so much money on consumers paying overdraft fees, this allowed them to offer "Free Checking" to everyone.

3 - NSF Checks are not included in this...you can still overdraft your account with a "hot check".

4 - If you are relying on a Line of Credit to kick in as overdraft protection, you will still need to "OptIn". Your account needs to go into the negative for the computer to actually pull the funds from your LOC. Check with your individual institutions on this - I just know how it is at the ones I use.

5 - From reading some of the previous posts, I take it some of you only have one account. And if you're like a lot of other hard working Americans, you are living paycheck to paycheck. Everyday I see people having to intentionally overdraw their accounts - what else are they to do when a child is sick, needs medicine and they have no money? Emergencies happen to everyone but not everyone has an Emergency savings account or other funds available.

6 - Keep An Account Register!!!! Unless you have so much money you don't need to keep up with it, you do NOT know if you are about to overdraw your account. Keeping a register current helps you have more control over your own money. Looking at it online is not a very dependable way to do this. It is not your banks fault that a purchase has yet to go through. It depends more on the merchant and the system they use for dc/cc purchases. Some transactions can take several days before they actually hit your account.

Please speak to someone at your financial institution before making your decision. The letter in the mail is very generic and does not answer many question you may have.

 

[Luvchefmic]

I am glad I read the thread...I had originally opted in and just went to my bank web site & opted out. I saw no sense for ME to have it as no one is using a debit card until I absolutely 1000% know for sure the money is available.

 

[Jaklackus]

When I worked at a bank many moons ago..I used to approach things from the 'what's best for the customer' stand point and not the bank profit standpoint.... I got a lot of grief for it and I rarely met my sales goals , but I was able to sleep at night......19 y/o stepson recently switched his savings account to Chase and started a checking account in the process...with a debit card(*shudder*)...I went because I wanted to make sure they didn't talk him into overdraft coverage... I didn't even have to say a word, the Chase employee was great and recommended against it and explained why ...what they send in he mail isn't necessarily what they are selling in the branches.

 

[TheRatPack]

When debit cards came out I was so excited....everything was supposed to clear the bank quicker and I could quit writing checks....LMBO!!!! Yea right....sometimes it takes longer for a debit transaction at McDonalds to clear then it does to pay a bill with a check clear across the country. I just about to the point of using cash only....but then there is no paper trail for certain bills and so that's what keeps me from it.

And those pre-authorizations can kill you.....I have 2 right now for Disney and 2 for 1.00 from gas stations.....again....so close to just using cash.

 

[bridget]

I just mailed mine back today.

From a customer stand point, do not allow the bank to cover debit transactions. Have it rejected at the check-out counter. Otherwise your $1 soda pop just cost way more than $1.

It has made me mad for years that banks do this and people have no idea at the time they were going to overdraw their acct and end up with a fee!

I also noticed at my bank the fees are going up to cover ACH and checking transactions if you are overdrawn.

Please, please sign up for overdraft protection if your bank offers it! At my bank it is a $5 fee but it transfers the money from a savings account to the checking account if the need ever arises, and this avoids all the other fees.

 

[si-am]

I don't understand why, in this day and age of internet banking, anyone should need overdraft protection. I can look at my account 24 hours a day and see how much money is in there. I don't write checks anymore so there's nothing mysterious ever floating around out there that might clear unexpectedly.

I've never overdrawn because I always know exactly how much I have in the bank.

Maybe I'm just kind of Type A though.

 

[bridget]

I feel the same way.


However, I believe even opting out doesn't protect you totally, b/c they might still cover recurring debits like gym memberships...

A recurring debit is an ACH transaction. Yes it is a debit to your account, but it not from a debit card, it goes through the ACH system, and those will have higher fees at most banks.

The opt-out option does not include ACH and checking fees.

 

[Luvchefmic]

I don't understand why, in this day and age of internet banking, anyone should need overdraft protection. I can look at my account 24 hours a day and see how much money is in there. I don't write checks anymore so there's nothing mysterious ever floating around out there that might clear unexpectedly.

I've never overdrawn because I always know exactly how much I have in the bank.

Maybe I'm just kind of Type A though.

Totally agree with you