Bankrate has an extensive article on “courtesy overdraft” services tied to debit cards. These services prevent your debit card transactions from being denied, but have the unpleasant effect of charging you anywhere from $20-$35 for this “courtesy.”
Common sense would dictate that if you’re trying to take out more money than is in your account, the ATM or point-of-sale authorization system should either refuse the withdrawal, just as it would with a credit card, or let you know that you’ll be overdrawn and you’ll incur a fee; but that’s not what’s happening.
What’s also troubling is that most bank customers are automatically enrolled in courtesy overdraft programs without their knowledge. Banks aren’t required to send a notice to the customer that they’re enrolled in the program unless the bank chooses to promote the program, and most don’t. Consumer advocates say these programs are nothing more than high-interest, short-term loans foisted upon unsuspecting customers.
Bankrate says that you should be able to opt-out of courtesy overdraft programs by simply calling your bank and asking. If they say it’s not possible, you should escalate your complaint to someone higher on the food chain.
Have you opted-out of your overdraft program? Why? Why not?