Overdraft fees hit record high, study finds
It’s a little cheaper in 2021 to withdraw from an off-network ATM with your debit card, but it will cost you a little more, on top of an already high price, to use your card for a purchase. when you don’t. You don’t have enough funds in your checking account.
According to Bankrate.com annual report Current Account and ATM Fee Study, overdraft fees hit a new record high of $ 33.58. The average cost of overdrafting an account, which occurs when you try to pay with a checking account with insufficient funds, increased slightly from $ 33.47 in 2020, according to the study.
For the 13th year in a row, the most common fee charged by banks to cover the shortfall is $ 35. According to the study, with a margin of 7: 1, more banks increase overdraft fees than they decrease them.
In response to the study’s findings, John McWeeney, president and CEO of the New Jersey Bankers Association, noted that consumers today have many ways to avoid overdraft fees.
“With tools designed to alert customers of low balances or overdraft balances, and the ability to link their checking accounts with other accounts such as savings and credit cards, deficits and overdrafts are now over. easy to avoid, ”he said. “These tools and services not only help consumers avoid overdraft fees, but also avoid incurring bad check fees.”
The Bankrate study found positive news for people who cannot easily get to an ATM at their own bank when they need money. According to a survey of hundreds of banks in the United States, the average total cost of withdrawing from an off-network ATM is $ 4.59. That’s down for the second year in a row, and that’s mainly due to more and more institutions allowing free off-grid withdrawals.
“Despite the growing prevalence of free off-grid withdrawals, these aren’t the only fees to worry about,” said Greg McBride, chief financial analyst at Bankrate. “All ATM owners surveyed still charge non-customers, so avoiding ATM fees always means avoiding withdrawals outside of your network.”
McBride said one way to avoid ATM fees is to use the refund option when making a purchase at a store – most merchants won’t charge you a fee for this. Also, many community banks and credit unions are owned by ATM alliances nationwide, so you may have more free options than you think.
Contact reporter Dino Flammia at [email protected]
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