A recent report by the National Foundation for Credit Counseling, a Maryland-based nonprofit credit counseling agency, indicated that 26 percent of respondents plan to opt into new ATM and debit card overdraft fees that were created by federal reforms of the financial industry.
“It is disturbing that this many people live so close to the financial edge.” said Gail Cunningham, NFCC spokesperson. “Anticipating that they will overdraw their account, they are willing to exacerbate the problem by paying a fee to have their purchases approved. The real answer lies in examining the root problem and resolving it, as continued overdrafts can result in some significant financial damage.”
Beginning on Aug. 15, bank customers must sign up for overdraft protection, before the bank will be allowed to charge customers extra fees in exchange for covering the transaction. Customers that do not authorize the overdraft fees will no longer be able to withdraw cash at ATMs or use their debit cards if they do not have sufficient funds in their accounts.
“Even though there may be a small embarrassment if a transaction is denied, the consumer should evaluate this inconvenience against the potential savings and value of solving the underlying financial issue that resulted in the overdraft,” Cunningham said. “Know that if you have already opted in, you can always cancel the program.”