October 1, 2009
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News: Chase and BofA Address Overdraft Fees
Overdraft fees have become the new thorn in Americans' side as they have made the switch from credit card spending to swiping debit cards. Gone are the days of floating checks and rushing to the bank to make that deposit before the check hits. Remember those days of high overdraft fees. Many had switched to using their credit cards to avoid them. It was safer and easier to make one monthly payment rather than risk miscalculating or rushing to get to the bank on time. However, since many consumers are now using debit cards, they have found banks are playing by a whole new set of rules. Banks are not only assessing fees based on when the card was swiped rather than when the transaction actually hits the bank for payment, they are choosing how the debits are applied. In some cases, when the highest transaction is deducted first, it has the potential of sending one, two, three, or more very small transactions that would have easily cleared into an overdraft situation. So now, instead of owing the bank one fee for one transaction, multiply that by four. It can really sting and all the interest saved by not using the credit card has just been ripped away.
In the heat of consumer outrage, two of the nation's top banks and credit card companies, Bank of American and JPMorgan Chase, have announced that they are changing they will handle overdraft fees. As of October 19th, Bank of America, the nation's top credit card company will capped overdraft fees to no more than four transactions per day. Most importantly, the bank will not charge any overdraft fee on any transaction amounting to less than $10 a day. Additionally, Bank of America will give customers the opportunity to opt out of overdraft protection which has also been highly criticized as confusing and deceptive.
JPMorgan Chase has announced their new Blueprint program that offers credit card consumers an opportunity to better manage card payments by determining what expenses they would like paid off first and how they would like to handle payments on other items such as larger appliance purchases.