Bank of America to Eliminate Overdraft Charges on Debit Cards

With Bank Reform on its way in some form, Bank of America is trying to jump out ahead of some of the changes that may be forced upon them in coming months. And to that effect, they have taken the first step by eliminating over draft charges on their debit cards. This policy change will cost B of A tens of millions of dollars of fees and may force other banks to follow their lead.

In the future, customers who try to make charges with their debit cards will simply be declined if the funds in their account are insufficient. Consumer advocates have become increasingly vocal about banks charging over draft fees of as much as forty dollars for purchases as simple as a cup of coffee. ‘Consumers have shown a willingness to incur overdrafts if it’s covering mortgage payments or car payments, not to cover a hot dog or soda,” said Greg McBride, senior financial analyst at Bankrate.com.

Over draft fees on A.T.M transactions generated over 20 billion dollars in fees to the banking industry last year alone, so Bank Of America’s move is being closely watched by the entire industry, and is considered a very positive step by the bank to help restore faith in the financial system.

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