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BUSINESS Thursday 10 OcTOber 2019
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Overdraft fees steeper at banks than credit unions

By MARGARETTE BURNETTE record .)
A night out to the movies. A THREE WAYS TO AVOID OR
new shirt. Groceries. These REDUCE OVERDRAFT FEES
are all things for which If you are charged an over-
many people would gladly draft fee, it's worth asking
fork over $35. But overdraft your bank or credit union for
fees? Not so much. And a fee waiver. The institution
yet, that's the average fee may forgive the charge, es-
the country's largest banks pecially if you have a good
charge customers who deposit history and no pre-
overdraw their accounts, vious overdrafts. You may
according to a NerdWal- also want to ask your bank
let study. These fees occur if it has a formal forgive-
when banks approve trans- ness program. Some institu-
actions that exceed an ac- tions have policies to waive
count's balance. They are the first fee charged each
often assessed per trans- year. Here are some other
action, so customers could ways to avoid future fees:
face multiple fees in a day. 1.SET UP A LINKED AC-
The study also found that COUNT FOR OVERDRAFT
the average credit union TRANSFERS. Banks generally
overdraft fee is nearly $10 will let customers designate
less than that of large banks. In this Aug. 11, 2019, photo a man puts his Visa card on a stack of cards for a split check at a a savings account or line of
Other institutions, including restaurant in New Orleans. credit to serve as a backup
some online banks, don't Associated Press source of funds in case the
offer overdraft programs, checking account is over-
and so debit card transac- country's largest credit At the beginning of the charge extended over- drawn. Some banks offer
tions that would overdraw unions. month, Jackie authorizes draft fees — also called this service free of charge.
an account are declined. —58%: The percentage payment for her electric "continuous" or "sustained" Others may assess a trans-
That means the customer of surveyed banks that bill, due on the 15th. But by fees — for accounts not fer fee of around $10. It's a
wouldn't be charged an charge overdraft fees that the time the due date rolls brought up to a posi- cost, but it's much smaller
overdraft fee at all. indicate they also charge around, she has had a few tive balance within a few than the typical overdraft
In our analysis, we calcu- continuous overdraft fees unexpected expenses. The days. Extended overdraft fee. If the backup account
lated the average fee at for accounts that remain electric bill is processed as fees can range from $6 to is a line of credit, custom-
institutions that charge for negative for several days. scheduled, but it sends the $38.50, with some recurring ers will also need to pay
overdraft protection and HOW OVERDRAFTS OCCUR account into negative ter- on a daily basis, depending interest on the amount bor-
outlined ways customers Customers have to first "opt ritory. Later that day, with- on how long the account rowed.
can reduce or avoid these in" to a bank's overdraft pro- out checking her account's stays negative. 2.OPT OUT OF OVERDRAFT
costs. tection program. This gives balance, Jackie buys lunch If an account is not brought COVERAGE. If you're signed
KEY FINDINGS: the institution permission to using her debit card, and up to a positive balance, up for an overdraft pro-
—$35: The average per- clear a transaction even if uses the card once more the bank could close it and gram, ask your bank to
item overdraft fee in Sep- there is not enough money to pick up detergent later report the account to a remove you. Without the
tember 2019 for personal to cover it in the account. that evening. The bank ap- consumer reporting agen- protection, any debit card
checking accounts at the Approval for each transac- proves all three transac- cy, such as ChexSystems. transactions that would
country's largest banks. tion happens at the bank's tions, but issues $35 over- Having a ChexSystems file overdraw your account
—$26: The average per- discretion. If cleared, the draft fees for each. can make it harder to open would be declined at the
item overdraft fee in Sep- bank generally charges an And things may still get a new account elsewhere. point of sale. While that's
tember 2019 for personal overdraft fee. worse for Jackie. More than (Read more about how to inconvenient, at least you
checking accounts at the IMAGINE THIS SCENARIO half of the banks surveyed clear up your ChexSystems won't pay overdraft fees.q