With the recent enactment of CARD and the fact that fewer and fewer people are using the credit cards they already have or applying for new ones, the credit card issuers and banks are scrambling to keep the profits up and the fees rolling in.
Case in point, recently many banks are sending out special notices to consumers encouraging them to sign up for overdraft protection and telling them if they refuse to sign up, their debit transactions will be declined if there is not enough money in the account even if they make a deposit to cover the cost that day.
?Even in case of emergency? is underlined for emphasis and used to create fear in the aggressive campaigns to get people to go ahead and sign up for overdraft protection that will allow the banks to go ahead and honor a transaction that occurs when the account is lacking the funds to cover it. The banks can then charge an outrageous fee to cover their costs.
Unfortunately, for many years this service was pretty much an automatic perk of doing business with the banks but the CARD act requires that the banks now have consumers opt-in for this type of overdraft protection.
Banks are now engaging in an aggressive, all-out marketing effort to get people to opt-in. This overdraft protection applies to debit cards but it also applies to automated teller machine transactions if a person needs to withdraw more money than they have available.
For further information, see “Banks Apply Pressure…”
