The next fee from the banks to be pay-as-you-overdraft

Imagine a situation where you have finished your shopping and reached the checkout counter only to realize that your debit card has been declined as you don’t have enough money. Chances are that you may either take some groceries out in order to be able to pay up with whatever is left in your checking account or you may simply slam the cart and vow to ‘opt-in’ for overdraft facility.

Alternatively, you may simply hear a ping on your mobile phone as this is one of the pilot tests that are being run at the moment. Now Bank of America is trying something unusual where it would try to buzz the customers and alert them that they could make a payment using their card, but only if they make an on-the-spot decision to pay the $35 as overdraft fees. You may instead avoid that overdraft fee if you can remember to put back the some extra money into your account before the end of banking day which is by 8 p.m., at any of the ATMs that belong to the Bank of America network.

There are ways in which you can spend using the plastic even if it means spending way beyond your means.

In general, credit unions and banks will never charge customers a dime if the transactions on their debit cards are declined either at a store or at any ATM especially if it due to insufficient funds. However, if you really want to buy something, then you must consider if paying an overdraft fee of $35 on the spot is worth it. You may also have to pay other additional fees as well.

According to a ruling by the Fed Reserve, banks and credit unions will have to first obtain customer consent where the customer will opt-in for an overdraft facility where the customer would be charged an overdraft fee to process a transaction when there is shortage of funds.

Jean Ann Fox, consumer federation of America’s director of financial services, states that the fees tends to pile up very easily. Fox has been urging customers not to opt-in ever since the new rules took effect during the summer of last year.

Now, after more than a year, consumers are still unaware of what opt-in actually means. Some customers even assume that they will not be charged any fees on overdrawn checks by simply opting in. But that is not true as this holds good only on debit cards.