Breaking News: Bank of America to End to Overdraft Fees!

I don't know a single person who LIKES overdraft fees but we've almost all dealt with them when we've accidentally spent more money than we actually have in our account. I admit, I'm guilty of spending too much and paying an overdraft fee here and there. My guess is that most of you have been victim of an overdraft fees at least once in your life.

What are overdraft fees?

Overdraft fees are fees that you incur if you accidentally withdraw or make a purchase that you don't have enough money to pay for. Often when this happens, your bank will charge you a fee for spending more money than you have in your account. You must then pay this fee when more money is added to your account. Note that if you have a nice cushion in your checking account, you may never have to deal with overdraft fees. All the more reason to save money to cover unexpected expenses!

The New York Times just reported that Bank of America is planning to end overdraft fees! Now instead of being able to spend more money than you actually have, if you do not have enough money in your account, your card will simply be declined.

You will also have the option to opt in for overdraft protection in case you have re-occurring bills that you want to make sure are paid BUT you'll be paying a premium of anywhere from $10 or more for the convenience of withdrawing too much money from your account.

The article quotes that, "last year alone, banks generated about $20 billion from overdraft fees on debit purchases and A.T.M. transactions, and $12 billion more by covering checks and recurring bills, according to Moebs Services, an economic research firm."

Why is Bank of America giving up tens of millions or even billions by doing away with overdraft fees? They want to win you back as a customer, regain your confidence and trust in them as well as continuing to build their reputation.

Will other banks follow? Only time can tell but let's hope so!

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Again, make your bank WORK FOR YOU! Find out what your bank's overdraft policies are and if you don't like what they tell you, it might be worth looking around for another bank.

We all hope that we have enough money in our accounts and that spending too much will never happen. But if you're living paycheck to paycheck you might be spending more than you'd like on overdraft fees simply because you don't know the rules and regulations.

It's true that overdraft fees may be eliminated but be sure to read your statements for any new changes and charges that might apply to your account!