By Ralph Hipp Want a combo meal, need a skinny mocha latte? Just swipe your card and debit it out of your account.. it's only $35!
That's what happened a few times to my daughter, and plenty of other college teens who are new to the debit card game. But it's serious business to many of our nation's banks. Overdraft fees of $30 for each debit transaction your child doesn't have the money to cover, helped those banks rack up $38 billion of business last year. It is a massive profit center for the unscrupulous bank operations. It's about to stop next summer, where federal regulations would begin to require those banking profit centers to alert you that you do not have the balance to support your debiting habit. Till then, watch your child's bank account drain for each $4 swipe for a fast food meal.. or a cup of some delightful creation from Starbucks. Those $4 cups of lattes or cappucinos become a lot more expensive when the bank adds on its overdraft fee.
And when the bad banks deliberately display that you have a positive balance.. when you're already out of cash.. just so you'll make a withdrawal and trigger another overdraft charge.. well, that's just pure meanness.
The new Credit Cardholders Bill of Rights is only beginning to kick in this year. More changes will be made next February.. and additional laws take effect after this current college year. The bill will prevent unfair hikes in interest rates and changes in the terms of any customer's credit card accounts for charges or payments of their bills. They have to give you 45 days notice of any interest rate, fee and finance charge increases. You would have not two, but three weeks to make your payments after receiving your statements. The law will begin to stop, or slow down, the huge and unnecessary fees by mail, phone payments or electronic transfers. It will require the big guys to be fair in the time they force you to make your monthly payments. It will among quite a few other issues, prohibits the credit card guys from charging you a late feed after they deliberately delay crediting your payment to your account. So the Credit Cardholders Bill of Rights is at least a huge law making a difference to help your personal finances.
On debiting that Starbucks caffeine surge, you'll have to watch out for that on your own! Don't forget about those fees! Ralph