Avoid escalating bank overdraft fees

Government rules that went into effect in 2010 were supposed to help curb abusive bank fees.

Now your bank must get you to sign up for overdraft protection. Then it will cover you if you spend more money than you have in your account. For instance, if your account is overdrawn, you’re still able to use your debit card to buy a cup of coffee, a magazine, or a pack of gum. But for each transaction you can be charged as much as $35 a pop. Banks are raking in more than $31 billion a year in overdraft fees.

Consumer Reports says here’s how to get some real protection. First, decline your bank’s offer to opt in for overdraft protection. And if you’re already signed up, opt out. You won’t be able to use your debit card if you don’t have enough money in your account. Be aware, you can still be charged overdraft fees for items such as a bounced check and automatic withdrawals if there isn’t the money to cover them. Consumer Reports says another move to minimize fees is to link your savings and checking accounts so that you’ll have that much more money to draw upon when your balance gets low. You might get charged a transfer fee, but those are generally much lower than overdraft fees.