How Much Do Banks Benefit from Overdrafts? 3 Things You Can Do
How Much Do Banks Benefit from Overdrafts? 3 Things You Can Do
Seeing that overdraft charge on your bank statement is never a fun experience. Your bank statement is already full of withdrawals and fee deductions, so realizing that you have paid $35, $70, $105 or more to your bank in overdraft fees over the past month just adds to your woes.
It gets one thinking, "How much do banks benefit from overdrafts?" The answer is: a whole lot. In fact, banks together make over $30 billion per year in overdraft-fee-derived profits each year in the U.S. alone. As you can see, overdraft programs are no small potatoes for banks. And, they will do what they can to continue to earn these fees from you in the future, month in and month out.
If you are concerned about banks making money via overdraft fees at your expense, here are 3 things you can do:
1. Complain to your bank and hope for a refund: There is no shame in lodging a complaint with your bank about the overdraft fees you are paying. After all, in some cases you can clearly demonstrate that a mistake has been made and that you should get a refund. Still, doing this regularly can get old, given that it uses up your valuable time.
2. Switch to a different bank overdraft protection bank: Another thing you can do is just to up and leave your bank in anger. However, in many cases, this is like going from the frying pan to the fire: most national and local banks also have strict (and expensive) overdraft fee policies.
3. Switch to a no-overdraft-fee bank: A third option you have is to find a bank whose policy is to never charge you an overdraft fee - even if you overdraw the account. These banks will never try to charge you an overdraft fee. Now, that's refreshing!
Yes, banks do benefit greatly from the overdraft fees you pay them each month. Why not stop feeding their profits and instead find a better bank?