Over the course of the last month, I’ve paid $30 in overdraft fees to Citibank. I would’ve bounced 3 checks if not for the overdraft protection. I’m madder than a rabid raccoon about it. No, I’m not in any kind of financial trouble. I actually have a healthy emergency stash in my Citibank account.

The problem is in November, Citibank changed its overdraft policy.   Apparently I was notified by an insert in my account statement.  I read my statements online, and rarely look at the printable version.  I was caught unaware.  In the past they would draw from my overdraft credit line of $2400 to cover any account debit that exceeded my balance. This was perfect for me as I generally keep very little in my checking account. It’s a non interest bearing checking account. I have been much better off keeping the majority of my money in the attached saving account or money market account. As I check my account directly or indirectly through an agregator such as Yodlee on daily basis, I tend to notice my over-extensions, usually day of. I would then be able to quickly transfer money from my savings account, and everything would be good. Over the course of the last three years, I paid less than a $1 in total interest associated with me drawing down my line of credit.

My system has come to a screeching stop. Citibank now charges me $10 each time I dip into my overdraft line of credit. Citibank had been unusual, and now it’s following what has become standard overdraft “protection” policy. Bank of America has charged $25 for each (which has been raised to $35) for as long as I remember.  One of the reasons I bank(ed) with Citibank was the overdraft policy.   It was a feature that made sense instead a “feature” intended to extract more dollars from the customers.

Most banks offer overdraft protection, and most offer it by linking your checking account with your savings account.  When a debit exceeds the balance in the checking account, the bank automatically funds that debit via funds from the savings account.   For this privilege, the bank charges you, the customer, a $25 fee in the case of Bank of America.

Citibank had been above the fray, and for this I have a been a loyal customer.   This new change makes me question if my loyalty is still deserved.   The problem is Citibank’s new rule is standard practice rather than the exception.