Introducing… Debit Card Fees!

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Fees, fees and more fees. Banks are finding more and more ways to make debit cards expensive to use.

Granted, the worst fees are for misuse, mainly spending more than you have in the account. But charges for “overdraft protection” weren’t supposed to happen. Debit cards are appealing precisely because you cannot spend more than you have. At least that used to be the idea.

Now, banks are often adding overdraft protection with little or no clear notice to the customer. So, instead of having a charge denied if your checking account runs dry, the expense will be approved and a fee tacked on. It can cost more than $30 for each offense, even if each overdraft is much smaller than that. Some banks even reorganize the order of your transactions so that the bigger purchases come first, which means that you might accrue more overdraft charges.

Fortunately, it’s usually easy to thwart the various fees.

While the bank may put overdraft protection on your account without you realizing it, you generally can cancel it.

If you do want this feature, see if the bank has an “alert” service that will tell you when your balance falls below a level you specify. Wachovia (Stock Quote: WFC), for example, has an easy-to-use e-mail alert function for checking and savings accounts on its Web site.
Many banks now have smartphone applications for accessing accounts. Ask the customer service people or check the bank’s site.

Of course, you can phone the 800-number on the card to check your balance.

Overcharges are most likely when more than one person has a card linked to the same account -- a husband and wife, for instance.

Problems can be reduced if each person has a separate account, making it easier to keep up to date on all charges. Some couples use two separate accounts and a joint one.

Another option: Keep your checkbook with you. Whether you use checks or the debit card linked to the account, record every expense in the check stubs. It’s old fashioned, which means time-tested.

If there’s any doubt about having enough in a checking account to cover a debit charge, use a credit card instead. Just remember to pay the bill off during the grace period so you don’t rack up a finance charge in place of the overdraft fee.

Managing a series of accounts is a lot easier with a financial program like Quicken (Stock Quote: INTU). That way, up-to-date information on all your accounts can be assembled in one place.

Finally, use the BankingMyWay.com shopping tool to find the best interest-bearing checking account. After locating a few good deals, go online or phone to ask about the range of fees you could face. Don’t overlook credit unions, which often have kinder policies.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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