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Bank of America ((NYSE: BAC) has brought to an end the overdraft fees associated with debit card purchases. This decision can end up costing the bank tens of millions in revenue each year but it would also force the hand of other banks to do the same, which is good news for consumers.

In the past, consumers who used debit cards to make a purchase but didn’t have enough funds to cover the total amount were still approved for the charge at the time of purchase. However, after the purchase, an overdraft fee would be charged to the account. If more than one purchase was made on a given day, each subsequent purchase would result in an additional overdraft fee. About 60% of the bank’s overdraft fees were collected from debit card transactions. Bank of America is the nation’s largest debit card issuer.

Bank of America now states that effective in the summer of 2010, customers who do not have sufficient funds in their accounts for a purchase will have their card declined at the time of the sale. This decision comes to light as banks await the new federal ruling that will require them to get permission from accountholders before providing overdraft protection services on ATM withdrawals and debit card purchases. Bank of America customers who try to withdraw cash from an ATM without the appropriate funds are already being warned they may proceed with the transaction but will face a $35 overdraft fee for doing so.

The bank will continue to provide overdraft services for checking accounts and automated payments for a fee but made the decision based on the need for trust. Since the disruption in the banking industry has caused many consumers to distrust financial institutions, Bank of America hopes to win back trust from old and new customers. Executives of the company say a common theme heard from customers is they want the bank to let them know when they don’t have the money to spend.

Many consumers found themselves falling into deep debt after they racked up hundreds or thousands of dollars in overdraft fees making small, everyday purchases like a cup of coffee. The Federal Reserve finally stepped in and starting in July 2010, will require that all banks get account owners consent for overdraft fees before they can be charged. Most banks automatically enroll customers in the overdraft programs without approval so customers are not expecting the fees.