whats-behind-those-urgent-notices-from-your-bank: Personal Finance News from Yahoo! Finance
If you are the type, like me, who throws away all extra "junk mail" from your financial services it would be easy to miss these very important banking changes. The banks are counting of a certain percentage of the population to do just that! As the article mentions, banks make BILLIONS in overdraft fees so it is in their best interest for you to continue to have the overdraft protection line so they can whop you with an overdraft fee if you go over your balance by a dollar. This legislation is especially important to those who use debit cards for all daily little expenses.
The article also provides a number of possible alternatives of how you can set up your accounts to optimize your use of funds and protect you from large expenses for silly mistakes. I want to add an additional idea: keep separate accounts for your primary bills from your daily use account. I don't know about you but I don't want my mortgage payment or light bill to bounce, period. I want overdraft protection for these payments. Possible fees, especially on credit card payments, are more than the OD fee and your record could be tarnished if your payment is posted late. It may takes days before you are aware of the problem.
If you keep your spending money in a separate account and funds run low because you forgot to write something down your transaction will be rejected and you therefore be "notified" of the error without a big fee attached. Keeping a reserve $20 in your wallet allows you to buy that morning coffee that most of us can't do without. This will provide you the time to go figure out what mistake may have been made, or if your spouse used the card and forgot to tell you. If you think that would create embarrassment then weigh the chagrin against the hundreds of dollars that might have already been spent on OD fees that make you sick when the bill is opened.
Bottom line is that many people are keeping lower balances than they would like as they are trying to stretch every dollar. The ideal situation would be to keep high balances wouldn't it? In the meantime, we all make mistakes. Review the options and choose what will work best for your situation. Pass the word along to those you know have complained about the fees in the past.