What I’ve Been Up To

A High Price To Pay For Embarrassment

I think of the scene in You’ve Got Mail.  Meg Ryan gets to the front of the cash-only line at a store New Yorker’s recognize as Zabar’s on the Upper West Side when she discovers she doesn’t have enough cash, only plastic.  “I don’t have any money,” she is forced to admit.  “Only this.”  The cashier (a pre-Grey’s Anatomy Sara Ramirez) doesn’t want to bend the rules and swipe her card.  Tom Hanks, whom Meg is trying desperately to avoid, turns on the charm and Ramirez relents.  But we’re meant to think she’s mortified. The same sort of mortified you feel when your credit card is declined in a restaurant or a chic boutique.

Well, for the record, I like this movie. It’s one of those — like the American President or Serendipity — I  watch every time it’s on TV. But the embarrassment factor?  I don’t think so.

And neither does the randomly-selected, not scientifically-valid, sample of folks I’ve been asking a similar question: Would you rather have your debit card turned down at checkout for insufficient funds or fork over $35 to $39 in overdraft fees?  “Are you kidding?” is the typical response.  “Let them deny the card.”

Starting July 1, 2010 they’re going to have to.  At least unless you let them off the hook. The Federal Reserve has ruled that banks will no longer be allowed to automatically enroll their customers in overdraft protection programs for ATM and most debit card transactions. This means, unless you’ve got the money in your account, your debit transaction will be denied and you’ll have to come up with some other form of payment.  That’s great news, particularly for anyone who’s been subjected to the multiple fees overdrawing your account and then debiting freely can layer on in a single day.  It can, literally, cost hundreds.

The question is — what do you do now, until the new rule takes effect?  Well, you can hope Congress takes action.  That might put a lid on fees creeping higher, though it wouldn’t likely speed up the clock.  The more effective strategy: Tell your current bank you want to opt out NOW.  It may work.

Bank of America began allowing consumers to opt out of overdraft in mid-October and won’t charge overdraft fees if you’re less than $10 overdrawn.  Starting next June, it will also start to limit the number of overdraft fees a single account can incur in a year.

Chase will also allow opting out as well as cutting the number of overdrafts charges per day you can rack up (if you don’t opt out) to three from six.

And Wells Fargo (and Wachovia) will also let you opt out as well as eliminating fees on over drafts of $5 or less and capping fees at four per day.

If you’re assessed a fee, call and complain immediately.  The more business you do with the bank, the more likely you are to see it reversed.

Finally, how about banking online — if you’re not already — so that you can keep better tabs on the money flowing into and out of your account.  A few keystrokes and you be able to avoid the problem entirely.  No matter when your bank decides to join the parade.