Federal Reserve rules implemented in 2010 were supposed to protect customers from getting hit with overdraft fees if they unwittingly made a purchase that put their account in the red. Now, two years later, banks are still raking in billions, and overdraft fees have hit an average of $30, an all-time high. If you’re wondering what gives, you have company. The Consumer Financial Protection Bureau (CFPB) is wondering the same thing, and according to a new report, it’s taking a hard look at the overdraft practices of the biggest banks.
They called it the “$39 cup of coffee.” At many banks, customers were automatically — often unwittingly — enrolled in overdraft programs that would permit debit purchases to go through even if it would overdraw their account, to the tune of up to $35 a pop. But a year and a half after new Federal [...]
Chicagoland teenager Daniel Ganziano thought he was doing the right thing when he opened an account last year with TCF Bank near his Illinois home to learn how to handle money responsibly. Instead, Ganziano learned that bank fees can very quickly spiral out of control — in his case, to more than $229 in less [...]
The online bank ING Direct is introducing a new debit card and e-banking account designed specifically for teenagers. But considering how the product works, it’ll probably appeal more to moms and dads.
The banks have lost the swipe fee battle, and soon it’s expected that every time a debit card is used, the store where that card is swiped will collect a little more money, and the institution issuing that card will collect a little less. While the fight is being waged between banks and retailers, it’s [...]
Bank customers don’t like fees. Early on during the debate over reforming debit card overdraft programs—in which a customer was charged $30 or $35 for swiping a card that lacked enough funds to cover the bill—a survey was conducted to see how many people would prefer that such a transaction would be declined, so long [...]
A managing partner of a financial services consulting firm makes a novel argument: Modern-day customer “service” mainstays such as misleading pricing structures, surprise gotcha charges, excessive fees such as debit-card overdrafts and cell-phone ETFs, confusing, always-changing privacy rules, and other policies that drive consumers crazy are actually bad for business.
When Bank of America eliminated announced it was eliminating debit card overdraft fees, many observers were puzzled. Why would BoA give up such a big money-making scheme entirely, rather than simply tweak it to fall into line with new regulations regarding overdraft protection and fees, like most other banks are doing? And, more importantly, what [...]
Some insight as to why you really want to avoid payday loans, store-affiliated credit cards, and high overdraft fees.
Last week, the bank made news by eliminating debit card overdraft fees. That’s not quite correct, though: Bank of America has basically eliminated debit card overdrafts entirely. Starting this summer, when you try to use your debit card but don’t have enough money in your account to cover the bill, your card will be rejected. [...]
You “win” when stores OK your debit card purchases even though there’s not enough money in your account to cover the bill. And as a post-game bonus, you get a trophy filled with overdraft fees.
