July 28, 2009
-
News: Debit Card Overdraft Fees Big Business
Banks have already begun finding loopholes to impose massive fees on debit and credit card customers despite the recent signing of the new credit card reform bill. The bill is aimed at protecting consumers from the deceptive and unfair practices of credit card companies. However, it doesn't appear to be doing much good. Banks have risen to the occasion and have proven that they will continue to pluck the consumer bare to feed the fat cats of Wall Street with massive earnings. Of course, contrary to what most consumers believe, banks won't stop a transaction from being processed if the customer's account is at a zero balance. Oh no, they allow the transaction to go through and then charge the customer a hefty overdraft fee.
Many Americans have reduced their dependency on credit cards and switched to using debit cards. These increased numbers have made the practice of charging these overdraft fees so profitable that nearly every U.S. bank has jumped on it. BB&T based out of Winston-Salem, NC charges $35 each time you swipe your card and the funds aren't there to cover it. That's right. So if your automatically deposit paycheck somehow got delayed on Friday and didn't arrive until Saturday, your $5 lunch on Friday just cost you another $35. Bank of America, one of the nation's largest credit card companies and based out of Charlotte, NC is a little more forgiving. They charge $35 for each overdraft transaction greater than $5.
With increasing numbers of credit card customers switching to debit cards, the Nilson Report estimates that nearly 60.2% of electronic payment transactions will be made with debit cards. That number amounts to nearly $40 billion. Revenue alone relating to overdraft fees is expected to reach nearly $38 billion; nearly double. If you think your local bank is your friend, guess again because there is no free lunch.