They email me once a week. They send me a letter once a week. Leave me alone already, Chase!
An amazing improvement in banking is going to happen on August 15, 2010. Banks will no longer be able to honor debit card transactions that exceed the amount that you actually have in your account without your permission. This means that a $1 purchase will not overdraw you and come with accompanying $34 overdraft fee (well, that's what Chase's letter says they charge - your bank might charge even more). Many Americans have felt the sting of that $35 candy bar, but from now on, unless you tell the bank to authorize transactions in this manner, they can longer stick it to you like that.
So, in accordance with the new credit and debit card laws enacted by the U.S. Congress, I received a letter in the mail from one of the banks I have a debit card from, Chase, telling me that I needed to make a choice...Overdraft, or nor overdraft? A declined $1 purchase, or a paid $1 purchase with a $34 overdraft fee? Needless to say, I quickly went online and told Chase where they could stick their overdraft protection and their $34 fee.
Here's where Chase started really getting on my nerves. Since electing for NO OVERDRAFT, I have been getting email after email and letter after letter warning me of the serious, life-altering mistake that I have made. Naturally, Chase is worried because they are about to no longer be able to literally steal millions and millions of dollars from its customer with these b.s. overdraft charges on debit card purchases $34 at a time. They've never made a dime off of me in fees, and the emails and letters continue!
"When you don't have enough money to make a purchase or pay for something unexpected," the most recent letter exclaims, "Chase Debit Overdraft Coverage may allow your everyday debit card transactions to be authorized at our discretion."
If you're in a real emergency and you need some serious help, that debit card is not going to buy you a ticket home, or a $500 part for your car. The overdraft "protection" that Chase is offering is not going to be enough money to help you out if you are in a real jam. The overdraft "protection" offered to you by these banks on your debit card is designed to make money for the banks from your mistake, or your misfortune.
For any reason, if you overdraw, they will authorize it - oh, you better believe it - but it's not to help you! It's to generate revenue for the bank.
While Chase now limits its $34 dings to three per day, that is not always the case at every bank. Sometimes, there are no daily limits to fees. Imagine if you started your day overdrawn without knowing it and you went in the morning and bought coffee or breakfast. Then, later in the day, you buy a magazine at the book store and lunch to eat while you're reading that magazine. Even later in the day, you stop at the grocery store on the way home, stop and get your dry cleaning, stop and buy pet food, and finally buy dinner at a take-out place.
Oh, you'd better believe your bank is going to pay for your debit card purchases, my friends. In the course of the day, they'll loan you the money because you owe them $34 x 7 transactions to the tune of $238. Don't believe me? Ask around. We've all got at least one friend that has fallen victim to this debit card overdraft "protection" b.s. Again, I have to point out that some banks are starting to limit the number of transactions per day they will ding you with a fee, but for Chase's three times a day limit, that is still $102.
America, don't overdraw - know what's in your account, but more importantly, if you make a mistake and don't know how much you have in your account, don't give these banks the right to gouge you with their overdraft "protection" by agreeing to let them keep this revenue generator on your debit card!
Also, there is a loop hole of which you should be aware. It's hidden in the fine print of your notices, so they hope you get bored with reading the Bank-ese before you get to it, but even though you may COMPLETELY OPT OUT of overdraft "protection", if you have recurring automatic charges set up to bill to your debit card and one or more of those recurring charges causes you to be overdrawn, the bank does still have the right to pay it because your recurring payment has authorized them to do so, regardless of what you have and have not agreed to in terms of Overdraft. So, don't put your recurring automatic charges on a debit card. Put then on a credit card instead.
Again, the bottom line is that the best thing you can do is always know exactly what is in your accounts at all times, know what transactions are hitting the bank automatically, and be conscious of all of this when you are out and about town spending money with your cards. Needless to say, we're not perfect, so in the case of an unexpected event, make sure you've declined that overdraft protection so the bank cannot take you for hundreds of dollars in fees.
Oh, and by the way, Chase, if you're reading this - stop emailing me and stop sending me letters, trying to scare me into giving you free money!
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