New debit card rule begins

Myrtle Beach, SC - By Brandon Herring - bio | email

MYRTLE BEACH, SC (WMBF) - Overdraft protection is no longer an automatic feature on bank checking account debit cards. Beginning August 15, an existing bank customer who wants to have overdraft protection on his or her debit card must notify the bank and "opt-in." The rule began for new accounts on July 1.

Some customers like Tammy Davis of Myrtle Beach have enjoyed the convenience of the overdraft protection on her debit card purchases.

"The advantage to having it covered is that your butt, for lack of a better word, is covered in all situations," Davis said.

Because her bank always covered debit card overdrafts, her card was never denied. However, that has come at a cost especially if she overdrafted a few times before realizing it.

"You got a 33 dollar fee for the first one, the second one, the third one, the fourth one," Davis explained. "So by the time you got home at the end of the day you were really in a lot of trouble financially."

Davis said she would really rather have her card denied than risk the extra charges. So she will not ask her bank to continue the overdraft protection.

"If I'm using that card that day and it gets declined I know I've got to get money in the bank," she said.

Overdraft protection will continue on almost all debit cards with a checking account linked to a savings account. That is because most debit cards with a savings account backup already required permission to use overdraft protection.

Dennis Nazzaro of Murrells Inlet is one such customer with a savings account to backup his checking account and debit purchases. Fees to overdraft from a savings account are usually much smaller than if the bank temporarily covers the overdraft of a stand-alone checking account.

"That helps, and I haven't had any problems with that system," Nazzaro said.

The new change does not apply to paper checks or to automatic payments set up with your debit card either.

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