You Are Paying an Insane Amount in Overdraft Fees
In 2010, federal regulators banned some of the more egregiously customer-screwing bank fees. In response, banks are just using overdraft fees to continue sucking you dry.
In 2012, overdraft fees generated $32 billion in revenue for banks. Thirty two billion dollars! In overdraft fees! That's revenue that the bank had to do almost nothing to earn, except to write a policy saying that they will charge you usurious overdraft fees as often as possible. And banks keep cranking that penalty higher and higher. The Wall Street Journal reports today that "The median fee for withdrawing more from a checking account than a customer has on deposit increased to an estimated $30 in 2013—a record—up from $29 in 2012 and $26 in 2009." What does that mean for the average customer?
There were 7.1 overdraft incidents per checking account on average last year, according to Moebs, down from 7.4 in 2012 and 9.8 in 2009. Such incidents include overdrafts caused by debit-card transactions, ATM withdrawals, checks and bill paying linked to a checking account.
Seven overdrafts a year at $30 a pop means the average checking account customer is paying $210 a year. And with the average checking account balance standing at $4,434, that means the average bank customer is paying almost 5% of their account balance annually in overdraft fees.
1. That is an insane annual fee. Overdraft fees should be either curbed by regulation or "disrupted" out of existence by some intrepid entrepreneurs. It is inarguable that banks are exploiting their customers unfairly.
2. STOP OVERDRAWING YOUR ACCOUNT SO MUCH. You have $4,434 in the bank. How can you possibly overdraw that seven fucking times per year? Get your shit together, man.
[Photo: AP]