Banks are still charging overdraft fees and making big bucks

According to a recent survey, banks are still charging their customers big bucks by way of overdraft fees and other such charges due to the mistakes we make. However, it doesn’t have to be that way, if we take a few precautions.

Banks don’t just rob us off our money; they instead use ways and means to trick us into giving into those extra charges such as overdraft fees. These fees might be incurred while you withdraw money from the ATM, use debit cards, etc., without alerting you that you may have overdrawn from your account. This is a perfect and legal way of going about their business – and lucrative too. This brings in revenue of about $1.77 per annum.

There were regulations last year, where bank customers were supposed to get protection from being unknowingly enrolled into overdraft programs, but that seems to have failed. Around 100 million American citizens seemed to have willingly opted in for these overdraft programs knowing the consequences fully well. The overdraft fees haven’t changed and have remained steep averaging around $35 for each overdraft that is made via any of the largest banks in the nation.

All the facts and figures are available in the Consumer Federation of America survey report that has covered the 14 major banks in the nation. Alternatively, you may also go through the hard copy by The Associated Press, but the best report is one that is written by Marlys Harris of CBS MoneyWatch that offers good reading, especially because of the adjectives that she has used.

There has also been some good news in the Consumer Federation report. A few major banks that include Citibank, Fifth Third Bank, Bank of America, and Wells Fargo, have either altered, stopped, or have announced a change in plans as they will change the practice of processing the biggest overdraft of the day first, where the banks could slam you with the overdraft fees on many transactions instead of a single one.

For example, you may begin your day with about $100 in your checking account, where you may use the debit card to purchase something at the store for about $9, buy T-shirts worth $40, and then grab a bite at Subway paying $10, then end it with another purchase worth $103. If the largest purchase is processed last, then you will have an overdraft fee of $35, and if the biggest purchase is processed first, then you would be slammed with a fee of $105.