Image via Wikipedia

It’s very important that you remain vigilant when it comes to your finances. This is especially important in light of some of the changes that might be coming because of the Credit CARD Act. You might be surprised to know that some of the upcoming changes as a result of the new card rules actually affect debit cards.

One of the new rules is that in order for your bank to allow an overdraft when you use your debit card, you will have to opt in ahead of time. This rule goes into effect in July of 2010. This means that transactions over your account balance will not go through unless you have specified that you want them to.

For banks, this is something of a bummer. A large portion of bank revenue comes in the form of overdraft charges. They charge between $25 and $45 per transaction. So, if you make three overdraft purchases of less than $10 each, it will cost you between $75 and $135, depending on the fees the bank charges. You can see why overdraft revenue is so important to banks. But if you don’t opt in, banks can’t get this revenue. And, since they are enterprising businesses, banks are likely to want to come up with ways to make up for that lost revenue.

Keep an Eye Out for Increased Fees

Since it will be harder for banks to make the same amount of money on overdrafts, it is important to keep an eye out for other fees that banks could conceivably begin charging. One of the biggest changes might be an institution of annual fees for debit cards. Some credit cards are already starting to charge annual fees if you don’t spend a certain amount each year, and it may be that debit cards start doing the same think. Other fees to keep an eye out for related to your bank accounts include:

• New service fees.
• New account minimum fees.
• Fees for linking accounts.
• Fees for paper statements.

Another possibility is an increase in rewards debit cards. There are already rewards debit programs that reward users for use of the debit card. However, these programs often already charge fees. You are also likely to see an expansion of programs that appeal to customers, such as rounding up your purchases to the nearest dollar and then putting the difference in a linked savings account.

Evaluating Your Banking Needs

It is not certain that any of these changes will come as a result of banks’ decreased ability to collect overdraft revenues. And it may be that banks hold off until they see how many customers decide to opt in. While it is expensive to allow overdrafts, the fact of the matter is that many consumers find they like the convenience of their purchases going through — even if they don’t actually have the money in their accounts.

In any case, it is important to understand your banking needs, and keep an eye out for changes to fees on your account. Carefully read communications from your bank over the next few months to make sure you understand when new fees come into effect. Also, watch to see if such things as CDs and rewards checking accounts end up with lower yields. Don’t be afraid to shop around for a bank that charges fewer fees, and offers better customer service and savings yields.