Remember my post about debit cards being a cash cow for banks? Well the NY Times story that inspired the post caused major change. The paper reports today that Chase and Bank of America plan to “drastically overhaul their debit card programs…changing the way they credit transactions and allowing customers to opt out of overdraft protection.”
B of A is going to let customers turn off the overdraft protection, which can lead to enormous fees, starting Oct. 19. In Jun
e, the bank plans to limit the number of times a customer can use their overdraw on their account. And customers can choose to have overdraft protection or not when they open an account.
Chase is going to start crediting transactions chronologically instead of ringing up the biggest withdrawals first, which can lead to extra fees. Chase is also going to limit the number of overdraft fees to three per day and will not charge when accounts are overdrawn by less than $5.
Let’s hope these changes lead to other banks changing their debit card policies to benefit consumers. Because it’s about time!
UPDATE: This comment from reader Tamara makes me want to move to Canadia!
All this debit stuff in the US is so foreign to me. I was in Chicago recently and most places we went said “we take debit”, but really that means, “we take credit cards, but it’s okay if they are hooked up to your bank account and are kind of like debit”.
In Canada NO ONE carries cash because we all have actual debit cards that are issued by our banks and the money comes right out of our bank accounts. They are not VISA, or MC debit cards, they are *just* bank debit cards. And there is little to no fee to use them, and if there isn’t money in your account, and you haven’t previously set up an overdraft, your transaction is declined and your purchase doesn’t go through.
Also, debit cards are accepted EVERYWHERE from major retailers to 7-11 to the dollar store.