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Judgment On Financial Institution High Overdraft Fees And Bank Checking Accounts

By John Shephard

The financial institutions are going to get their deserved fate all the rest of this year, as the president’s consumer-friendly laws begin to clamp down on all the financial service companies. But why did Bank of America give in and yield voluntarily in a profitable areas as a way of taking money out of your account via overdraft fees. The bank just announced in March of 2010 that it was eliminating it. At one time, if you didn’t have enough money in your bank checking account and you used your debit card shopping, and you didn’t have enough money in your bank checking account, they would let you buy it anyway, and then charge you punishing overdraft fees.

Now, if you try to buy something without enough money in your account, you’ll just be turned down, that’s all. This is bad news for Bank of America since overdraft fees account from debit cards rake in 60% of the fees. And Bank Of America is the nation’s largest debit card issuer. This is going to cost them millions of dollars off its bottom line, and will eat into other banks profits as well.

You can still have an overdraft facility on your bank checking account if you choose; but it will be opt-in. If you happen to be at an ATM or a store checkout, and you’re being billed for more than you have, the machine will tell you that you can proceed, but at penalty of $35 in overdraft fees. And you can still have your overdraft facility for checks or bills for a fee. Banks charge $35 dollars and more for penalty fees, if you went over even two dollars more than you had.

This is excellent business for banks – if they put out money on a formal loan, they wouldn’t make $35 off $2, now would they? The banking industry last year alone made something like $25 billion on overdraft fees at ATMs and checkouts. This new practice is certainly going to effect their bottom line when it comes into effect on July 1. Banks are asking people to opt in for overdraft services nowadays and a means to get their extra charges.

So are they really such villains at the banks? We want to give you the story. Some time ago I worked for a bank and felt bad because of the practices the bank foisted on its customers that I had to go along with. For instance, let’s say that a customer has $100 in her bank checking account. She first uses her debit card to spend $10 at Burger King, she then spends $50 to pay her cell phone bill, and then she spends $102 on gas for her car. That means that with the first two purchases, she was completely within her limits, and she should be charged a penalty only for the last purchase. What they’ll do at the bank though, is, they will charge her the $102 for gas first, so that it wipes out her account, they’ll charge her penalty for it, and then they’ll record the other two smaller expenses. That way, they get to charge for $35 penalties three times instead of just once, if they did it the right way.

But in their defense, the banks argue that they’ve been pushed to such unfair extremes in their industry. Banks have been made to comply over the years to consumer protection laws hurting their bottom line. They say they’ve been regulated and taxed big time for decades, and they have no choice but to do what they can to work their way back into profitability.

One other top source of fees for banks is the extra markups on bank checks given when customers order designerchecks. Banks do markup these designer checks by fifty percent or even more since they buy them from a 3rd party source. By ordering direct and using designer checks coupon one can save even more plus one gets a larger choice of motifs and scenes.

As such, these practices are not good; but they say that most of their rules are only to apply to people who overdraw. They say to those over-draftees, don’t overspend.

If you see yourself running low on personal checks, why not buy you checks direct from the manufacturer? Get designerchecks that that are quality checks plus you’ll have a vast choice of designs and categories to scan and decide on at designer checks online. Fast shipping and pocket 50 percent in savings

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Article Citation
MLA Style Citation:
Shephard, John "Judgment On Financial Institution High Overdraft Fees And Bank Checking Accounts." Judgment On Financial Institution High Overdraft Fees And Bank Checking Accounts. 23 Jun. 2010. 18 Oct 2014 <>.

APA Style Citation:
Shephard, J (2010, June 23). Judgment On Financial Institution High Overdraft Fees And Bank Checking Accounts. Retrieved October 18, 2014, from

Chicago Style Citation:
Shephard, John "Judgment On Financial Institution High Overdraft Fees And Bank Checking Accounts"

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