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STRICTLY BUSINESS: The one-penny lesson

It’s funny how sometimes one penny can mean the difference between being OK and having lots of troubles.

For Jennifer Menard, one penny meant $70 in overdraft fees. The Bradenton single mom did a late night run to the grocery store recently for breakfast food, wrote a check for $9.85 and learned too late that she only had $9.84 in her account.

You guessed it. Two overdrafts and $70 later, Menard was on the phone to her bank, explaining her plight and pleading for some leeway. Afterall, it was only one penny.

Every penny counts for Menard, who works in housekeeping part-time at a Longboat Key timeshare.

“That’s ($70) is half a paycheck for me,” she said. “I was fuming, I was so mad. I told them I’d go down and give you a penny.”

But the bank stuck by its guns. Except it did agree to give her a courtesy $11 refund.

With all the new banking changes for consumers, everyone should join Menard and start watching their bank balances very closely.

Due to changes in Federal Reserve rules, beginning Aug. 15, banks won’t be allowed to charge $20-30 each time you overdraw your account unless you choose to sign up for overdraft protection on your debit card and ATM transactions. Instead, your transaction will be declined. It is just one of the charges aimed at protecting consumers from excessive banking fees.

The new rules, however, do not cover checks or automatic bill payments that you may have set up for paying bills like your mortgage, rent or utilities. Your bank can still automatically enroll you in its standard overdraft practices.

But analysts are warning that to make up the $50 billion banks are projected to lose from the changes, many are looking at other ways to make money. Some have already increased interest rates on credits cards, closed accounts, reduced limits and switched fixed rate to variable interest rate accounts.

Others are considering steps like charging extra for paper statements, annual fees on credit cards and increasing fees on things like safe deposit boxes and stop payments on checks.

Many of these charges aren’t new, says Greg McBride, senior financial analyst with Bankrate.com, but “there is a greater likelihood you’ll see other fees now.”

McBride advises consumers to “pay close attention to the fine print and details. That is never more true than now.”

Like any business, banks — when denied one revenue stream — will look for another.

McBride likes the fact that the rule changes are putting banking choices into the hands of consumers. They offer more flexibility and a chance for consumers to decide if they want to pay for overdraft protection or not. But it comes at a price. McBride says there will be fewer free checking accounts and other fee changes.

Menard admits she occasionally has overdrafts. Times are tough and working part-time doesn’t bring in much. But she has learned her one penny lesson.

“I’m obsessed with it,” she said about her bank account. “I check it every day.”

We all should.

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