Has Your Bank Offered You “Courtesy Pay,” a “Buffer Zone,” or “Debit Card Advance” Services?

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These carefully-phrased services sound quite nice, don’t they? But if you read the fine print carefully, you’ll discover that these programs are strategies for banks to collect fees on customers who are careless with their account balances.

A post from Bob Sullivan explains some of the banks’ new hard-sell tactics, and reveals that most of the bank brochure phrases are just euphemisms for overdraft charges—the $35 fee a bank customer pays when buying something with a debit card without enough in his account to cover the bill.

The full-court press is on to get bank customers to sign up for overdraft coverage by August 15. If customers don’t opt into the program by then, their debit cards will be declined when there’s an insufficient account balance, and they won’t be charged an overdraft fee. Banks want to keep the fees flowing—debit card overdrafts have generated $10 to $15 billion in revenues annually—which is why they’ve been campaigning for customers to opt in. Of late, the pro-overdraft strategies have included extensive marketing campaigns targeting customers with histories of frequent overdrafts and the use of tricky phraseology like “courtesy pay” and “debit card advance.”

What’s up with that other phrase—”buffer zone”? Sullivan’s post explains:

Some banks are even taking the opportunity to create new products, such as Citizens Bank’s “BufferZone.” According to a description of a bank brochure provided to msnbc.com by Jean Ann Fox of the Consumer Federation of America, consumers can pay $4.99 per month to buy a $30 “buffer” on their checking accounts.

“That means overdrafts will be paid and the overdraft fees waived as long as the overdrawn balance does not exceed the $30 buffer,” the brochure says. “Keep small misses small. Sometimes it happens: your account is overdrawn by a couple of dollars, or even just a few cents. With BufferZone you can rest easy knowing that your small misses will stay small.”

In other words, you pay $60 a year just so that you can avoid occasional $35 fees. The thing is: Consumers who assumes they’ll overdraw their accounts probably won’t be aware of whether they’re overdrawing by $25 or $40. And when they exceed the $30 “buffer,” they’ll be hit with an old-fashioned overdraft charge—in addition to that $4.99 they’re paying monthly to avoid overdraft charges.

The bottom line is: If you monitor your accounts regularly, it really doesn’t matter if you opt in to overdraft protection or not—because you should never need it, and therefore you should never be hit with an overdraft fee.