Banks make big bucks from overdraft fees — more than $11.6 billion in 2019 alone, according to one study from the Center for Responsible Lending. And those fees, which are charged to customers when they spend more than they have in their bank account, can add up quickly.
A single overdraft fee, which hovers around $35, could be collected multiple times in a single day if automatic payments for different bills, for example, are scheduled on the same day funds in your account happen to be all used up.
Over time, these fees end up being “abusive” and “burdensome,” the Center for Responsible Lending says, hitting vulnerable households the hardest. Just 9% of account holders pay 84% of all overdraft fees each year. Those consumers usually carry balances of less than $350 as they face “relentless overdraft fees” that often prompt banks to shut down their accounts entirely.
At CESI, we’ve seen it happen repeatedly as we work with customers to shore up their financial health. And that’s why we’re excited to announce our new partnership with Waiver, a free app that will instantly stop banks from charging you an overdraft fee.
Here’s how Waiver works:
For CESI customers, this service is entirely free for the first four months. After that, the app only charges $5 when an overdraft fee is blocked, no monthly fees or optional tips — a substantial savings when compared to the typical fee of $35.
There’s a bit of fine print. For now, the program only is available to CESI customers with a Chase bank account and an iPhone. In the beginning, Waiver will provide protection for up to $100 once you sign up. That limit, however, goes up as you build a positive payment history.
The best way to avoid overdraft fees, of course, is to take control of your finances. The Federal Deposit Insurance Corporation offers these tips:
Know your balance
Whether it’s through the paper register that came with your checkbook or by checking your bank account electronically, always know how much money is in your account, the agency recommends. And don’t forget to note random ATM withdrawals; items you purchased with your debit card, which pulls funds directly from your bank account; and the timing of automated payments for bills. These items can add up quickly if you’re not paying attention.
Linking checking to savings
If you have a savings account, connect it to your checking account. That will allow the bank to move money from your savings account to your checking account when you don’t have enough money to cover payments. Banks typically charge only a small fee or no fee for these transfers, the agency says. Of course, you’ll need to keep track of the balance in your savings account, so you don’t siphon too much money away from that account too.
But, while there are steps to protect you from overdraft fees, at CESI, we know consumers sometimes need a helping hand when it comes to managing their finances. And that’s exactly what Waiver is. To learn more and sign up, head over to Waiver’s website.
Filed Under: Money saving tips
Consumer Education Services, Inc. empowers people to overcome their financial challenges and lead financially-healthy lives.
CESI is NOT A LOAN COMPANY