Bank Overdraft Fees Are Higher Than Overdrafts
NEW YORK (TheStreet) -- Uncle Sam, in the form of the Consumer Financial Protection Bureau, has taken a long look at bank overdraft fees and doesn't like what he sees.
Specifically, the CFPB has found that bank overdraft fees linked to debit cards "typically exceeded the amount of the overdraft itself."
Banks charge $34 on average for debit card overdraft fees, but the typical card amount that trip-wired the overdraft was $23, meanings banks get an extra $11 to settle the score with customers.
- Overdrafts are most of the vast amount of total checking account fees penalizing consumers. "For opted-in consumers, overdraft and NSF fees account for about 75% of their total checking account fees and average over $250 per year."
- Most overdraft fees are paid by a small fraction of bank customers. The CFPB says 8% of customers incur nearly 75% of all overdraft fees.
- Age matters with overdraft fees, as the 18-to-25 demographic triggers more than 10 overdrafts per year. Americans 62 and older represent just 2.8% of all overdraft fees.
- Banking consumers are quick to make good on their overdrawn accounts, with more than 50% becoming positive within three days and 76% within one week.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts