Debit Card

In: Business and Management

Submitted By dz7612
Words 1223
Pages 5
Part III: Debit Card
The debit cards have been out in the market since 1960s. They helped to change the way that people used money and bank accounts. Debit cards are frequently used to pay for purchasing at stores or other locations all over the world. They are also worked by debiting money from owners’ checking accounts. For many people in the United States, debit cards have taken the place of cash and checks. However, debit cards are still a relatively new banking tool. The debit card rules has been changed over time since debit cards were out in the market. There are two main changes that attract people’s attention in recent two years.
Electronic Fund Transfer Act: New Overdraft Rules
According to Board of Governors of the Federal Reserve System, new rules give debit card users additional options regarding overdrafts. An overdraft usually occurs when a debit card user make a purchase but don’t have enough money in the accounts to pay for it. Banks will cover the costs when card users become overdrawn by charging a fee (Board of Governors of the Federal Reserve System [BGFRS], 2010).
Banks used to automatically enroll customers in standard overdraft practices. Banks will cover customers’ transaction for a flat fee around $20 to $30 every time customers overdraw their accounts. Banks also offer an overdraft protection plan that provides a link to users’ saving accounts to cover transactions by charge less expensive fees than standard overdraft practices (BGFRS, 2010). The new overdraft rules provides that banks must not charge overdraft fee on certain debit card overdrafts-specifically ATM and one-time debit card overdrafts unless the customer “opted in (BGFRS, 2010)” to pay such fees.
The Federal Reserve’s final rules favor customers on most overdraft issues. However, there are some arguments concerning about the transparency of overdraft services related to…...

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