CONSUMER REPORTS -- When there is no more money in your wallet, there’s simply no more money. But that’s not the case with your bank account. There can be no money and then magically (insert fairy sound here) the money appears. It’s called overdraft protection. And while it allows you to buy what you want, it also comes with fees.
The Consumer Financial Protection Bureau is out with a new study finding consumers who opt
in to debit card and ATM overdraft are still at risk of incurring exorbitant fees, despite recent
regulatory changes.

Collecting overdraft fees is good business for banks and credit unions -- - generating an
estimated 33 billion dollars a year. And at least 2 large banks have been accused of using
deceptive practices to get you to sign up according to the Consumer Financial Protection

CR’s advice: don’t be pressured into getting overdraft protection. It’s not mandatory. Consumer
Reports says you’re better off declining overdraft protection altogether. Your transaction might
get denied, but one study shows you’ll save more than 20 dollars a month in checking fees.
Instead, sign up for text and email alerts that flag low balances. And link your checking to a
savings account which can cover shortfalls. either for free or a relatively small fee. CR also
recommend signing up for banking mobile apps so you can check your balance before you
make that purchase. That way you’ll know before you swipe if you’ve got enough cash to cover
the charge.

The CFPB also found the consumers who overdraw their accounts the most are those who are
most financially vulnerable, carrying low bank account balances and with lower credit scores. If
despite all your efforts you are charged the occasional overdraft fee, call or visit where you
bank and ask for the fee to be waived. Banks and credit unions will often extend that courtesy
to good customers.