Chase Dropping Overdraft Fees on Small Purchases
We dread overdraft fees.
And you’d feel the same if you’ve ever experienced the trauma of buying a $2 pack of gum with your debit card, only to realize that that $2 pack actually cost you $37, thanks to a depleted account and a $35 overdraft fee.
Such fees require a bit of decoding (we provide some answers on them here) since they vary from one bank to the next.
But there is one general rule: Banks tend to charge overdraft fees irrespective of your purchases. That is, an average overdraft charge of $35 applies whether you overdraw your account for a $200 pair of shoes or a $3 latte. It comes as no shock, then, that banks pocket huge sums thanks to this rule; top banks made $30 billion via overdraft fees in 2011, according to Business Insider.
But big changes may be on the way in the overdraft world. Effective July 22, 2012, Chase will eliminate overdraft fees on purchases of $5 or less. Chase customers are sure to benefit from this alteration in bank policy, written into the fine lines of Chase’s guide to checking accounts. They’ll avoid Chase’s $34 overdraft fee on each small buy and on multiple small buys in a row on an overdrawn account.
In the midst of these changes, don’t fret if your bank doesn’t follow suit. Non-Chase customers can nix overdraft payment, too, and can do so without the help of your bank.
Banks market overdraft protection as a convenient and helpful service, one that grants you spare cash when you need it most. But it’s a voluntary service, and you should treat it as such. According to experts at NerdWallet, you should opt out of overdraft protection, as it’s really only valuable in dire situations, such as when you’re completely out of gas on the way to work and need some $.
However, if you’re intent on keeping overdraft protection, you can still avoid paying the fee. Simply monitor your account often and be more attentive each time you swipe. Use LearnVest’s My Money Center to track your purchases, and see where your account stands relative to your monthly budget.
Spare yourself $35 (or more) of sloppy spending and check your balance now.