Alternatives to Overdraft Protection

[SecularMotion]

Thanks to the new overdraft law fully going into effect on Aug. 15, both new and existing bank customers will now only be able to withdraw more than is in their checking accounts if they opt in to pay for overdraft protection from their bank. Previously, banks had automatically signed up consumers for the service and then charged customers hefty fees whenever they covered an overdraft.

Now it appears that bank marketing campaigns to encourage customers to opt in for overdraft protection are working on at least some consumers, according to a new poll from the National Foundation for Credit Counseling.

According to the July online poll from the foundation, a credit counseling nonprofit group, about three-quarters of the 2,089 respondents said they were willing to “risk being embarrassed at checkout, but save the fee.” But the other respondents, about one-quarter, said they planned to opt in to overdraft protection despite having to pay a fee for a service.

If you’re one of the consumers willing to opt in, you may want to consider these alternatives to overdraft protection from the credit counseling foundation. “There are some very simple things that can save people from the serious financial damage that can result if overdraft fees add up,” said Gail Cunningham, spokeswoman for the foundation.

http://bucks.blogs.nytimes.com/2010/08/05/alternatives-to-overdraft-protection/?hp

[DJ13]

1. Im surprised the banks dont try to setup overdraft credit lines instead

Back when BofA was still halfway decent (late 80's- mid 90's) that was offered as an alternative to overdraft fees.

[Turbineguy]

2. My credit card is tied in

so if there is an overdraft they automatically xfer the money (in denominations of $100) into my checking account. I have to pay interest on the cash transfer from the date it takes place but there are no extra fees.

[More_liberal_than_mo]

6. ING does not charge for overdrafts

If you have an account at INGDirect you can apply for any amount of overdraft protecion you want (I have $1000). If you use it then it acts like a credit card except without the grace period. They currently charge 7.5% APR on the amount you are using. I overdrafted by about $300 and was able to put it back above 0 a couple of days later. I paid 4 cents interest on the overdraft, 4 cents! Other banks could do this but they are greedy and live off the $30 to $40 fees to do the same thing ING does for pennies.

[zipplewrath]

3. Credit Unions

My credit union provides this service for free.

[Bonhomme Richard]

4. People need to pay closer attention to what is in................

their bank account.

[blueamy66]

5. I agree.

But did you know that BofA will allow you to WITHDRAW FUNDS FROM THEIR ATMS when you don't have any?????

WTF?

[Bonhomme Richard]

8. I have used ATM's probably twice in my life and I think.......

one of those times was to activate my card. I'm just real anal about having enough funds with me to cover what I buy and atms freak me out for some reason. That's just me.

[SheilaT]

7. Bingo!

Some years back I got a checking account that was a no-fee account so long as I kept a certain minimum amount of money in it at all times. So as far as I was concerned, my zero balance was that minimum amount. It also meant I had a cushion just in case I had to dip into that, although I think I only did so once or twice in the 18 years I had the account.