Congress will get another chance to limit checking account overdraft fees that continue to annoy customers and produce billions of dollars in revenue each year for banks and credit unions.
To be sure there are bad actors (although very small in numbers), and there are quite a few good-but-not-amazing prepaid products (which still beat out a checking account with overdraft on an average use-case).
Calling all Electronic Orange accountholders: Use the comment area below to tell us about your experiences with your ING account and its overdraft features.
FORBES: How The End Of Overdraft Fees Could Wind Up Costing Cardholders
The online banks that do charge monthly fees also tended to charge lower amounts than traditional banks, and their average account minimums, overdraft fees and ATM fees were lower too.
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In July 2010, the Federal Reserve required banks to receive permission from each checking account customer before the bank provided overdraft protection for ATM and debit card transactions.
The bill would also ban the practice of posting checking account transactions in a way that maximizes overdraft fees.
The Federal Reserve announced new rules on Thursday that will prohibit banks from automatically enrolling customers in so-called overdraft protection programs, which charge high fees for exceeding the balance in an account.
It decided not to test a plan in which customers who were about to make a debit-card purchase but didn't have enough in their account would have gotten an alert giving them the option of buying overdraft protection.
Checking your account balance before you make a purchase not only protects you from an overdraft situation, but it also gives you time to consider if the purchase is worth making.
In addition to regularly monitoring your checking account, try to keep a buffer of cash in there to help prevent overdraft charges or even cancel the overdraft feature altogether (although you may run the risk of late fees from billers if you miss a payment due to insufficient funds).
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Banks are marketing either a program where overdraft transactions are covered for a fee or one that allows you to link a checking account to a savings account, line of credit or credit card so if you overdraw funds are transferred in as needed, says Greg McBride, a senior financial analyst at Bankrate.com.
Overdraft fees are charged by banks when customers try to spend more money than they have in their checking account.
There are no schemes to try to overcharge on overdraft by reordering the accounting process, but rather a live person will usually call you to say that your account has been overdrawn, and how we can help.
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