Felix Salmon on the "perfect overdraft"

Over at Reuters, Felix Salmon is touting another kinder, gentler version of overdraft protection that he says is standard in the U.K. There are no fees, just daily interest on the overdrawn amount. Salmon says U.K. banks treat this as a "negative balance" on customers' checking accounts. As a result, if you deposit more than that amount into your account, the overdraft automatically disappears.

"If this works in the U.K. (which also, incidentally, has much more consumer-friendly ATM fees than the U.S. has), I can’t see why it couldn’t work in the U.S," he writes on his blog. "But B of A chose a very different route. Why? I suspect because they want to keep the fee income from ATM withdrawals and checks, when insufficient funds are available. If you get rid of overdraft fees on debit card purchases, it’s much easier to keep them on everything else."

Several people commenting on the blog point out that what Salmon described as the U.K. model isn't that different from linking overdraft to a credit card account. At least one U.S. bank, USAA, already offers this service.