Overdraft Protection Mandatory?

With my first bank account, I was told that I could not get overdraft protection until I established credit. Which with my bank at the time, Wells Fargo, was a two year period. Granted that I didn't overdraw once. Now, some people are going to be pressured and bombarded with advertisements to pay overdraft protection on a monthly basis. I don't feel comfortable know that if I were wit a bank currently that I'd be asked to feel I've done no harm in having my account overdrawn by $50 or more. In fact, with my husbands new payroll card, I don't like it when he overspends. Even though he doesn't have to pay the $35 monthly fee (that's the corporate offices job) to have the amount paid back. Instead he only pays back the amount owed with his upcoming check. The card his company gave him is obligatory, not optional.

Still, this summer more banks will be sending mail out to their clients telling them that they must agree to a service of protecting their overdrafts. The letter will moreorless state, "Your debit card may no work the same anymore, even if you just made a deposit. Unless we hear from you, your everyday debit card and transactions that overdraw your account will not be authorized.After August 15, 2010 -- even in an emergency."

What caused banks to take action of practically having it be a requirement to buy overdraft protection? In 2009 it was estimated that $20 billion was generated in overdraft fees. Banks received an additional $12 billion from covering check and recurring bills. Ninety0three percent of overdraft fees come from fourteen percent of the people who exceed their balances five times or more a year.

Banks are trying a variety of methods to persuade customers to "opt-in" for overdraft protection and to keep the service. "Warning" customers that even if they try to pump gas they may not be able to fill their tank because the transaction would be put on hold even though the customer has enough funds in their account. The catch may be that if you go with purchasing overdraft protection, you can still be charge overdraft fees, It's one reason why some congress members proposed that one overdraft be charged per month with the maximum of six a year.

Bank OF America is currently not charging a fee if the overdraft is less than $10 per day. Even then overdraft fees don't exceed four per day. For Chase Bank it's less than $5 per day and three fees per day.

You can still accrue $100 on up per day with overdraft protection.

So, as far as I can tell, it's all a rip off! I'm glad I stick with cash and money orders. With receipts I can still keep a pretty good record.