“Despite the new opt-in rule, overdraft fees continue to be a costly pain in the neck for millions of Americans.”(Daily Finance, 2011)
Have you ever experienced overdraft fees? Has the two dollar cup of coffee cost you thirty five dollars in overdraft fees. Well that is all a thing of the past, because of the new regulations set forth by federal regulators right…wrong. "It is exceedingly difficult for the average consumer to find the basic information needed to either select a checking account or to responsibly manage the one they currently have,"(Daily Finance, 2011) said Shelley A. Hearne, managing director of The Pew Health Group. You can still be on the hook for over draft fees and not know it; you need to read the fine print and ask questions. Did you know that overdraft fees could be assessed to your account? How you may be wondering it works like this; if you had an auto debit coming out every month as a reoccurring payment even if you did not opt-in you could still be charged I bet you didn’t that. consumers are ill informed and they need to take some responsibility for their actions. They don’t care about the fine print and expect there errors to be returned to them no questions asked.
Banks are in it to make money just like any other business that is what consumers fail to understand. The services that the bank provides you cost money: online banking, customer service centers, branches, printed material…etc. Banks need to charge you fees to pay for these services and still make a profit. That is where overdraft fees come in. Consumers need to educate themselves and be responsible for monitoring their accounts the banks will not do it for you.
NANCE-NASH, SHERYL. (2011). Bank overdraft fees still plague american consumers. Retrieved from http://www.dailyfinance.com/2011/05/13/bank-overdraft-fees-still-plague-american-consumers/
Jerry B
4 comments:
My bank offers an insurance in case for the overdrafts up to 1000 without any additional cost. Till I didn't know this insurance, I paid plenty of overdfafted fees, which are ridiculously expensive.
People says that the overdraft occurs only when we dont have money, which is not true. The overdraft fees is there . the issue is that we pay more intention to our account when we have less money, and we realise that we have been charged
As someone that worked in a bank for several years, I can assure you that you only get charged overdraft fees when your account does not have sufficient funds to cover an item when it is presented for payment. Even though many banks now offer the option of allowing you to take your account negative without having any returned items, you ultimately are responsible for overdrafts that occur.
It's not rocket science, I have had a bank account for more than 20 years and I have never had an overdraft. How is this so? I keep good records and balance my checkbook every month.
Bottom line is we can blame banks all we want for being charged overdraft fees but that doesn't change the fact that they are 100% preventable by us and only by us.
My bank offers the ability to do a "cash advance", similar to a pay-day loan, where they charge a 10% fee on the initial transaction. They also offer the ability to link a line of credit to your account, but even then assess a fee when it is utilized.
My previous bank would allow up to $500 in over drafts, but would assess a $35 fee for each instance.
In both cases, the bank makes money while offering a service that is meant to be seen as customer service, but in reality is more closely aligned with predatory lending methods designed to generate as much revenue as possible.
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