After recent public outcry about bank fees, both Bank of America and Chase chose to reform their policies that had them charging $35.00 and up on bank overdraft fees. The mega-banks announced last week that beginning next year they would
eliminate overdrafts for debit card use and allow customers the option
to opt in for the services. They also announced they would reduce the
maximum number of overdraft fees from six to three per day and will not
charge the customer anything is the account is overdrawn by five
dollars of less.
While this initially sounds like good news for consumers, voluntary changes like these come with no guarantee. For proof, look no further than Citigroup, which made a fuss out of abandoning "universal default" only to reinstate the practice less than a year later, once attention had shifted away from the issue.
This year banks are expected to pull 38.5 billion in overdraft fees alone, double the revenue they make on credit cards.
The thing is, many people would say, just don't overdraw your account and you won't have a problem. Unfortunately, that can be easier said than done. See a Smart Money article that includes five bank traps consumers should avoid.
Banks are always looking for ways to make more revenue -but the way they are going about it has a crippling effect our pocketbooks. Hiking overdraft fees without telling consumers, spiking interest card rates and reducing credit limits are causing public outrage and damage to our economic recovery. Is there any wonder consumers are turning to credit unions or community banks, as they fight back - mad as hell!
The only sure way to protect consumers in the long run? Create a strong and effective Consumer Financial Protection Agency.
See Mother Jones: Score one for predatory Lenders
While this initially sounds like good news for consumers, voluntary changes like these come with no guarantee. For proof, look no further than Citigroup, which made a fuss out of abandoning "universal default" only to reinstate the practice less than a year later, once attention had shifted away from the issue.
This year banks are expected to pull 38.5 billion in overdraft fees alone, double the revenue they make on credit cards.
The thing is, many people would say, just don't overdraw your account and you won't have a problem. Unfortunately, that can be easier said than done. See a Smart Money article that includes five bank traps consumers should avoid.
Banks are always looking for ways to make more revenue -but the way they are going about it has a crippling effect our pocketbooks. Hiking overdraft fees without telling consumers, spiking interest card rates and reducing credit limits are causing public outrage and damage to our economic recovery. Is there any wonder consumers are turning to credit unions or community banks, as they fight back - mad as hell!
The only sure way to protect consumers in the long run? Create a strong and effective Consumer Financial Protection Agency.
See Mother Jones: Score one for predatory Lenders
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This is why I only use cash now and in the future. I am going to file for bankruptcy soon, just can't afford their rates anymore. They cause people to go under and that is a crying shame. We're just a number to them. How can they get away with these usury rates and the govt lets them?
Thanks for the post. This really speaks to the fact that consumers really must try to take control over their own credit. Read the fine print, question things that sound too good to be try, monitor your credit report, etc.
I was happy to hear that banks would be reforming their policies on overdraft fees. However, I have heard that some banks (i.e. Bank of America) may begin charging an annual fee on credit cards that did not have annual fees in the past. I hope they hear consumers outcry and reform their credit card policies too.