Chase, Bank of America Overhaul Overdraft Programs

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Bank of America Debit Card FrustrationSince it’s passing, the CARD Act has drawn both criticism and praise from just about everyone. Some were upset about the tightening of credit card approval requirements for college students. Others celebrated rule changes that required companies to apply payments to the highest interest rate balances. Some warned that credit card companies would change their business practices and make credit cards less accessible, since they would be less profitable. The issue has been covered here when Bargaineering broke the story that Citi would start charging an annual fee unless cardholders met a certain spending criteria.

Both Chase and Bank of America announced that they would be overhauling their overdraft policies. It’s clear they’re doing this to get ahead of the curve on the legislation but couching in “consumer friendly” terms. Some changes include:

  • Customers will be allowed to opt into overdraft protection. (both banks)
  • No fee if the overdraft is $5 or less,Chase, or $10 or less for one day, Bank of America.

Update: Wells Fargo / Wachovia are joining the party in offering the option to opt out ofoverdraft protection and no fee if the overdraft is less than $5.

Why they’re doing this is irrelevant, it’s just good that they’re doing it.

Chase and Bank of America lower overdraft fees [MarketWatch]

(Photo: rosengrant)

{ 10 comments, please add your thoughts now! }

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10 Responses to “Chase, Bank of America Overhaul Overdraft Programs”

  1. J. Crane says:

    i guess something is better than nothing, banks don’t profit from beind nice. that’s why i always use a credit union.

  2. finally! Personal finance writers have grumbled and complained about overdraft policies for years.

  3. Tim says:

    it would be better if people just didn’t overdraft their account too

  4. This is pretty great. I always found it terrible that banks kick you when you’re down (overdrafts…).

  5. eric says:

    “Consumer friendly”….nice try. 🙂

  6. daemondust says:

    My credit union is generally pretty lenient. Overdraft is a small fee (I think it’s $1 right now) and reasonable interest charges for the amount loaned. It’s around 20%, so high enough that you want to pay it back as soon as you can, but not so high you can’t get out of the hole.

    They also don’t re-order charges to run biggest to smallest debits before any credits. They post them as they come in, sometimes re-ordering credits before debits.

    I love the way ING Direct handled it when I opened my accounts there too. Pretty much the same as my credit union, but I took them up on the NO overdraft option since I won’t be using it and would rather have a charge declined than have to pay interest. I have credit cards if I NEED something and don’t have the money on hand.

  7. ENOGUH says:

    try TCF ( T he C ustomer F irst ) bank. LOL they got my wifes account for 1,072 in overdraft fees in 30 days. they charged her overdrafts on her overdrafts lol i watched her burn all her leftover checks and debit card. LOL this is who they screw T he C ustomer F irst

  8. Not and idiot says:

    How about you just don’t be an idiot and keep enough money in your account. I don’t care if the bank runs the largest transaction first, the smallest, or which they run first. I keep enough money in my account to cover the freaking checks I write. Period. Or I don’t write a check.

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