Chicago’s two biggest banks have diverging strategies on how to treat customers who overdraw their accounts using ATM and debit cards.

Starting July 1 for new customers and Aug. 15 for existing ones, banks need a consumer’s approval to process everyday debit and ATM card transactions that exceed the account balance. In the past, banks often have covered overdrafts, but socked the account holder with a $20 or $30 fee.

Market share leader Chase has been sending letters to customers warning them that, if they want overdraft coverage for ATM or debit cards, they must tell the bank.

“We want to give customers a choice,” spokeswoman Christine Holevas said.

If the consumer doesn’t sign up for debit-card overdraft coverage and doesn’t have enough money to cover the bill at a restaurant, the transaction will be denied.

If they opt into the debit overdraft program, Chase will cover a transaction, charging the consumer a $34 fee.

Consumers who opt into the program but never use it pay no fee. And no Chase customer is charged a fee if they’re overdrawn by less than $5.

The debit card overdraft coverage doesn’t apply to some payment methods, including checks, online payments or recurring debit transactions, such as gym memberships.

“Those transactions can still overdraw the account and result in non-sufficient fund and overdraft fees, no matter a customer’s decision on debit card overdraft coverage,” Holevas said. “The decision applies to everyday consumer debit card transactions.”

Meanwhile, Bank of America has ended its overdraft program for debit and ATM transactions.

“We’re responding to the overwhelming majority of customers who say, ‘Don’t let me spend money I don’t have,’ ” BofA spokeswoman Diane Wagner said.

Tom Feltner, vice president of Woodstock Institute, a nonprofit group that looks at fair lending practices, said forcing banks to seek customers’ approval for overdraft programs is a good first step.

But “we support Bank of America’s decision to eliminate overdraft on debit-card transactions,” Feltner said. “Debit transactions can happen quickly and are more likely to trigger spiraling overdraft fees.”

Greg McBride, senior financial analyst for finance Web site Bankrate.com, said 75 percent of consumers don’t overdraw their accounts with ATM or debit cards and probably don’t want to opt in; if their debit card is denied, they probably have access to cash or credit.

Another 10  to 15 percent occasionally overdraw but still have options.

The rest are the least likely to have other payment options.

They might want debit-card overdraft protection, or they might be more vigilant about their balances, he said.

“In the case of a hot dog and a Slurpee, no one wants to pay $30 if they’re overdrawn,” he said. “But what if you’re 300 miles from home and your car breaks down and you have no other options?”

The best defense, he said, is to link a checking and a savings account.