Editorial: Personal Responsibility Still Matters in the Post Overdraft Reform World

As legislation works its way through Congress, consumers will likely be no longer hit with several $30 or $40 fees whenever they overdraft their checking accounts, but that doesn’t mean that consumers need not worry about making sure their account is within good standing.

Banks have received much public criticism for posting transactions in a manner that will maximize the number of fees that it can collect from consumers. There’s even an industry publication for bankers called the Fee Income Report, which is a publication for bankers to discuss new ways to charge their customers with additional fees and bring in additional revenue for the banks.

Congress has taken an eye to these questionable overdraft and other fee policies that banks have instituted in the last several years and is working on new legislation to end the tide of excessive overdraft fees. Banks are hoping to avoid this legislation by making some smaller overdraft reforms themselves, but at the end of the day it’s not overdraft reform that’s going to keep you from paying excessive fees, it’s a matter of personal responsibility.

It’s harder than ever to keep track of account balances with checks, auto-drafts, ATM, debit cards and more, but despite all of the transactions that consumers deal with, it’s still important to manage one’s checkbook wisely.

One strategy that some consumers have used successfully is to keep a $500 pad in one’s checking account. Start out with $500 in your account ($100 or $1000 would also work), then treat your checkbook like you have a balance of $0.00, that way if you were ever to hit below your hypothetical “$0” mark, you would still have that padding in your account, even if your checkbook showed a negative balance.

Others have moved to balancing their checkbooks two or three times a month using online banking instead of using traditional bank statements. This allows them to have to reconcile fewer transactions at a time. It’s also a good idea to do your checkbook register in excel and let the spreadsheet do the math for you, that way you’ll avoid any addition and subtraction errors that you might make yourself.

Remember that a checkbook that’s properly balanced and used wisely will never result in an overdraft fee. You don’t need to wait for congress to reform overdraft fees, instead reform your own checkbook and you’ll never have to pay an overdraft fee again.



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