Avoid Bank Fees, Changes proposed for Overdraft Protection

By: | WSPA-TV
Published: March 30, 2009

Bank fees are on the rise. If you're like most people, you've had overdraft charges, bounced checks fees, or ATM fees taken out of your account. Money you need in times like these.

The Federal Reserve is considering changing the rules on overdraft protection so you don't have to pay if you don't want it.

Overdraft charges, bounced checks fees, ATM fees, said Greg Burgess, credit counselor for Compass of Carolina, "Before you know it, you could wind up paying a bank several hundred dollars in fees, so it can add up fast."

The FDIC says most banks automatically enroll you in overdraft protection, but don't tell you when your funds are too low. Overdraft charges can range from $10 to $45. So the Fed is considering either changing the rule, so you can either opt out of overdraft proction, or choose to opt in.

Burgess says you can avoid overdraft charges altogether by tracking your spending, especially online. "It can completely eliminate the need to reconcile your checkbook when your statement comes in on a monthly basis, because you've already done it."

Some banks will send free alerts to your email or phone when you're account is low, or alerts when bills are due, saving you last minute electronic check charges.

Avoid ATM fees by always using your bank's ATM's, or take out enough cash to last a week. Said Burgess, "Withholding a certain amount of cash so you don't need to make all those tiny debit card and check transactions throughout the week."

Ask your bank for a schedule of fees so you can avoid breaking the rules. Said Burgess, "You'll find those fee disclosures in the lobby of every bank location."

And if you are hit with a fee, ask your bank to remove it. "Call the bank, find out if there was a mistake made. They may reverse a transaction, and you'll save money that way," explained Burgess.

The bank may remove or reduce the fee just to keep your business.

Today is the last day to tell the Fed whether you want banks to have to get your permission before signing you up for overdraft protection. Here is a link to the Fed's comment page.

You can compare checking account fees at local banks at Bankrate.com