Earlier this week, Federal Reserve rules requiring banks to get your permission for debit card overdrafts went into effect. This might not be much of a surprise to you, since your bank has probably been sending you information, and encouraging you to opt in. If you do not opt in, any debit card transactions for amounts you do not have in your checking account will be denied.

The End of Automatic Debit Overdraft Protection

Prior to the new rule, banks allowed some transactions through — even if you didn’t have the money in your account. As a result, many people racked up fees before realizing that their accounts were overdrawn. Now, though, banks have to deny debit card transactions that have insufficient funds, unless you actually opt in. Hence the desperate mailings. Banks make billions on debit card overdraft fees, and without the opt ins, the banking industry could lose out.

Do You Need Overdraft Protection?

Some people would rather pay the fee, though, than be denied at the register by insufficient funds. It’s embarrassing to be told that your card has been declined. It’s even more embarrassing when it is a checking account debit card. So, there are plenty of people who feel that it is worth it to pay the fee and save face.

But you probably do not actually need overdraft protection. In reality, you are probably fine without it — as long as you are keeping track of your finances. If you keep track of your income and expenses, and know how much money you have, there is no need to find yourself in an embarrassing situation. Or to pay hefty overdraft fees to avoid that situation. Personal finance software can help you keep track of your spending, and you can always known how much you have available.

Indeed, for those who do not realize that they need to opt in, and have not yet, this could be just the wake up call they need to start paying better attention, or to trim their budgets, when it comes to finances.