subject: No Overdraft Fees Banks – 3 Ways to Switch [print this page] No Overdraft Fees Banks 3 Ways to Switch
Let me take you on a short (I promise!) guided tour of the history of the banking industry. I promise that this short tour will be worth your time, since at the end of the it you could save hundreds of dollars a year in overdraft fees.
Banking in Old Europe
The lending and borrowing of money has been in practice for at least a few millennia probably ever since money was invented. However, banking really started taking its present form in the old coffeehouses of London, England a few hundred years ago. People would meet there to lend each other money.
Soon, official banks were formed. The basic principle was simple: an average citizen would deposit his money into the bank and the bank would keep it safe for that person and even pay them a bit of interest t boot. Not a bad deal, and better than keeping one's money under the straw mattress at home.
Modern Banking
Fast forward to the 1970's in North America. Competition in the personal banking space became fiercer than ever. At that time, marketing and advertising started to play a more powerful role in how banks made decisions The marketing departments started thinking of a ton of new banking products that they could use to lure customers away from other banks and through their own doors.
Over the next few decades, this type of thinking spawned a whole slew of new banking products and services, including for example: the ATM machine, the debit card, free checking and overdraft protection programs.
The Coming of Overdraft Protection
Most of these inventions offer bank customers greater convenience and even a better quality of life than before they came along. The possible exception among them is overdraft protection, which has proven to be more of a mixed bag for customers.
You see, overdraft protection delivers exactly on what its name promises: it does indeed protect people from having their debit card transactions, checks, and credit card transactions from being rejected due to insufficient funds. However, it does NOT protect people from paying super-high bank fees. In fact, it excels at doing this!
For, as you know, every time your bank covers your overdraft for you they charge you a hefty fee for doing so. In fact, this large fee repays the bank for the potential "loss" of the micro-loan they extended to you (to cover the negative balance) hundreds of times over in most cases. It is for this reason that many people believe that overdraft protection programs do not really benefit the customer at all.
The Big Switch to No-Overdraft Fees Banks
Back to our mini history of banking: nowadays, there is a big shift away from overdraft protection. Even the U.S. Congress is trying to step in on behalf of the average bank customer to try to get banks to relax their strict overdraft fee policies. But, bottom line is that the only way to really avoid overdraft fees altogether is to switch to a no-overdraft fee bank.
3 Ways to Switch
1. Ask a friend for their recommendation of a no-overdraft fee bank that they like and use. (This is easy to do but may be embarrassing for some people).
2. Check your Sunday paper for an ad for this type of bank. (Newspaper ads can show a lot of detail about the offering).
3. Do an online search for a no-overdraft bank. (This option is great because it is easy to find a lot of banks in one place and then compare them).
No matter how you decide to switch, just do it soon. The faster you switch, the faster you will become a part of the latest wave of banking history as you become the customer of a no-overdraft fee bank.
