THE COST OF OPTING IN | Debit-card overdraft plans

Important information for those looking into a debit-card-overdraft plan:

There is no fee if you don’t opt in for debit overdraft.

Opting into a debit-card-overdraft plan has no impact on whether the bank will cover overdrafts triggered by checks and other types of transactions.

Carefully read the terms and understand the fees for overdraft coverage.

Pay attention to how checks, preauthorized automatic bill payments and other transactions are paid from your account. If a larger check or payment is processed first, you might bounce a couple of smaller checks and the fees can build up quickly.

Take time to understand how often you can be charged an overdraft fee. Bank of America will apply overdraft fees to four transactions per day at $35 for each overdraft.

Bank of America charges a second $35 sustained overdraft fee if the overdraft and first fee are not repaid in a few days.

Ask your bank or credit union to link your savings to checking to cover shortfalls in checking. The fee is generally much smaller to make a transfer from your savings — if you have enough money there — than to pay an overdraft fee per overdraft. A transfer fee can be $7 or $10 per day for a transfer of all the needed money from savings to checking to cover shortfalls. But overdraft fees can be $25 or $35 or $37 per overdraft.

You might spend $7 instead of $90 in some cases. Some credit unions offer a limited amount of free transfers per month. If you use online banking, you may transfer funds on your own from savings to checking at no cost.

Take time to shift money from savings to checking on your own as your balance gets low.

Compare rates and fees for checking accounts at banks and credit unions.

Source: McClatchy News Service