Released: July 29, 2007

Overdrafts fees bonanza for banks

Source: Harriet Johnson Brackey, South Florida Sun-Sentinel (Free Registration)

Have we all lost the ability to balance our checkbooks? In just two years, the amount of overdraft fees collected by the largest banks has increased by 70 percent, according to a recent study by the Center for Responsible Lending. It’s a big change from the past. There was a time when debit cards would be turned down if you did not have enough money in your account to cover a transaction.

But today’s debit cards never say, “No” and are a great deal for the bank. Debit-card transactions are the leading cause of overdrafts, according to the center.

“You can’t rely on a low account balance running into a brick wall and a transaction not going through,” said Greg McBride, a senior financial analyst at Bankrate.com. “That $4 coffee could cost you $34 with an overdraft fee.”

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