Your debit card is fee-free, but banks still find ways to get billions

TAMPA - Sharon Drapeau signed up for overdraft protection on her checking account, thinking it would protect her from penalty fees if she overdrew. Instead, "I got hit with the bank charge for the transfer and the bank charge for the overdraft, and because I had written a check I got charged the returned check fee," said Drapeau.

Consumer Reports' Greg Daugherty points out government rules that went into effect in 2010 were supposed to help curb abusive bank fees, but it hasn't worked out that way. "Now your bank must get you to sign up for overdraft protection. Then it will cover you if you spend more money than you have in your account," said Daugherty.

For instance, if your account is overdrawn, you're still able to use your debit card to buy a cup of coffee, a magazine, or a pack of gum. But for each transaction you can be charged as much as $35 a pop.

Banks are raking in more than $31 billion a year in overdraft fees. Drapeau feels overdraft protection is a sham. "Don't say that I'm protecting myself by signing up for the program when there's still going to be this charge," said Drapeau.

Consumer Reports says there is a way to get some real protection.

First, decline your bank's offer to opt in for overdraft protection.  If you're already signed up, opt out.

You won't be able to use your debit card if you don't have enough money in your account.  But be aware, you can still be charged overdraft fees for things like a bounced check and automatic withdrawals if there isn't the money to cover them.

Another good idea is to file alerts that e-mail you or text you when the account is under a certain amount that you set.  Then you won't get hit with charges you don't expect.

Consumer Reports says another move to minimize fees is to link your savings and checking accounts so you'll have that much more money to draw upon when your balance gets low.  You might get charged a transfer fee, but those are generally much lower than overdraft fees.

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