Get Ready for Changes to Your Debit Card

As of July 1, new changes are coming to debit card overdraft fees. The Federal Reserve is moving forward with its order that financial institutions be banned from charging customers fees for paying overdrafts on automated teller machines (ATM) and debit card purchases unless the customer agrees. This change is a result of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. Customers will now be given the choice to either opt in or out of overdraft fees on ATM and debit card transactions. (See new credit card rules.)

This means that unless you opt in for overdraft coverage, if you are paying for an item and there’s not enough money on your debit card to cover the purchase, your card will simply be declined. Under the new rules, banks must give customers who choose not to opt in the same features and account terms as those who do opt in.

Keep an eye on your mail.

Banks have already begun mailing out notices to customers, letting them know about the change and explaining how to opt in or out. These notices describe your bank’s overdraft services, the fees, and your choices. “The most important piece of advice that I can give is to read your bank notices. Too many bank customers just toss these letters aside,” says  John Ulzheimer, president of consumer education for credit information Website,

Call your bank.

In the past,  I’ve been guilty of not reading all of my bank notices. But it’s important not to let this one slip past you. Read it carefully and know your options. And if you haven’t gotten a notice from your bank about the new overdraft fee regulations, now’s the time to make a call and have your banking institution mail one out to you. 

Monitor you debit card balance.

Ulzheimer notes that paying attention to this particular notice and keeping track of your debit card balance is important because excessively overdrawing on your account could result in being reported to ChexSystems, a consumer banking credit reporting agency. Banks usually check this report before deciding to accept your business. You can get one free report annually by contacting ChexSystems and making a request through their Website. They can also be reached by phone at 800-428-9623.

Sheiresa Ngo is the Consumer Affairs Editor for Black Enterprise