In the old days, we got away with murder on ATM and debit card charges. We could charge pretty much whatever we wanted. We generally treated every debit card overdraft the same as a paper check overdraft and hit you with a hefty charge. Sometimes we took the liberty of putting incoming overdraft ATM and Debit transactions before deposits in order to charge you as many really high overdraft fees as we could. Once the deposit in waiting turned to cleared funds, the free money stream was (temporarily) over for us.
We miss those days. Sadly, too many malcontents complained to their congressional reps. Sadly, the government stepped in. Don’t worry, we can still make good money on charging you fees for overdrawing your Debit/ATM card We just have to reveal how our charges work and get you to opt-in. Our marketing people are very skilled at getting you to opt-in to stuff and making you feel like we’re doing you a favor.
. You can choose one of three options for Debit/ATM card overdraws:
- No overdraft allowed: We will not process the ATM or debit card transaction if there are not sufficient funds in your account to cover the transaction. No fees will be charged This is the default option, if you choose neither of the choices. Nobody wants their debit card refused or worse, for the ATM to refuse to give them the requested cash, right? We can frighten most customers into choosing one of the other two options:
- Overdraft Coverage: Overdraft coverage means that the bank may cover your overdraft, in essence lend your account enough money to cover the transaction(s). Of course we will charge you a hefty fee, similar to the fee charged for bouncing a paper check.
- Overdraft Protection: Overdraft Protection links a checking account with a line of credit, savings account, credit card, or second checking account. So, if you overdraw the account that your ATM or debit card is connected to, the bank’s computer will take the funds from a linked account to cover the overage. Once again, we’ll charge you each time this happens but most likely the charge will be a lot less than it would be for a paper check overdraft.
There are lots of other ways we bankers have figured out how to make money from our unsuspecting customers. For example: