BBB says: Don’t let overdraft fees take you by surprise
BBB – Recent polling found that millions of consumers are surprised by overdraft fees on their checking accounts each year. Better Business Bureau® (BBB®) advises consumers to familiarize themselves with their bank or credit union’s policies so they aren’t taken aback by a preventable expense.
That's according to the BBB's Pamela Hernandez:
In a recent Consumer Protection Financial Bureau (CFPB) report, over a quarter of respondents said that someone in their household was charged an overdraft fee or nonsufficient fund (NSF) fee within the past year. Most households did not expect the fee.
Each bank or credit union has its own policy on overdrafts – when a consumer withdraws more cash than is currently in their checking account. Many financial institutions will provide a line of credit to cover the charge when this happens, but they may charge the customer an additional fee.
The current average overdraft fee is $26. If a consumer isn’t carefully tracking their finances, a $5 purchase could end up costing five times what they expected.
The standard for overdraft fees may soon change. The CPFB proposed a rule in January to limit the fees financial institutions with more than $10B in assets can charge.
“You can avoid surprise fees by making sure you’re clear on your financial provider’s overdraft policies,” said Michelle L. Corey, BBB St. Louis president and CEO. “Research carefully and ask about these policies before choosing a new bank or credit union.”
BBB’s tips for handling overdraft fees:
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Visit BBB’s Financial Wellness HQ for more tips on tracking your budget and finding trusted financial services.
