The Latest Attack on Consumer Freedom

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Now that they’ve succeeded in imposing severe restrictions on credit card issuers, payday lenders, and their customers, the New York Times and its friends want to take away the benefits of debit cards, too.

The complaint now is that debit cards allow people to spend beyond the amounts in their checking accounts if they pay overdraft fees. This is, of course, a great service to consumers because it means that in an emergency you will not be stuck somewhere without any money, and you won’t be embarrassed by a rejected card.

For those who wish to avoid overdraft fees, however, there is a simple solution. It involves applying the same simple rule that is guaranteed to keep anyone out of credit-card debt: keep track of what you spend, and don’t spend money you don’t actually have.

Nonetheless, the the Times asks: “Do consumers actually want overdraft service? Can they use it responsibly? If so, what is the best way to deliver it?” I’ll bet you can guess who they think is best qualified to answer those questions.

Articles calling for new restrictions on consumer choice always include a sob story about someone who got himself into trouble, and this one is no exception. This time, the Times asks us to sympathize with a 59-year-old grad student who was charged overdraft fees for a $4.14 coffee at Starbucks and a $6.50 (student-discounted) ticket to the movies. For people like this we are all told we must suffer.

2:37 pm on September 10, 2009