www.cnbc.com Open in urlscan Pro
23.208.224.131  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip Navigation
5 Things to know this morning

Banks will collect more than $30 billion in overdraft fees this year. Here’s how
to avoid them
 * watchlive

CREATE FREE ACCOUNT
Markets
 * Pre-Markets
 * U.S. Markets
 * Europe Markets
 * China Markets
 * Asia Markets
 * World Markets
 * Currencies
 * Cryptocurrency
 * Futures & Commodities
 * Bonds
 * Funds & ETFs

Business
 * Economy
 * Finance
 * Health & Science
 * Media
 * Real Estate
 * Energy
 * Climate
 * Transportation
 * Industrials
 * Retail
 * Wealth
 * Life
 * Small Business

Investing
 * Personal Finance
 * Fintech
 * Financial Advisors
 * Options Action
 * ETF Street
 * Buffett Archive
 * Earnings
 * Trader Talk

Tech
 * Cybersecurity
 * Enterprise
 * Internet
 * Media
 * Mobile
 * Social Media
 * CNBC Disruptor 50
 * Tech Guide

Politics
 * White House
 * Policy
 * Defense
 * Congress
 * Equity and Opportunity
 * Europe Politics
 * China Politics
 * Asia Politics
 * World Politics

CNBC TV
 * Live Audio
 * Latest Video
 * Top Video
 * CEO Interviews
 * Europe TV
 * Asia TV
 * CNBC Podcasts
 * Digital Originals

Watchlist
Investing Club
 * Trade Alerts
 * Jim’s Morning Thoughts
 * Analysis
 * Morning Meeting
 * Trust Portfolio

PRO
 * Pro News
 * Pro Live
 * Subscribe
 * Sign In



Menu

 * Make It

 * USA
 * INTL

Search quotes, news & videos
Watchlist
SIGN IN
Create free account
Banks will collect more than $30 billion in overdraft fees this year. Here’s how
to avoid them
 * watchlive

CREATE FREE ACCOUNT
Markets
Business
Investing
Tech
Politics
CNBC TV
Watchlist
Investing Club
PRO


Menu


Personal Finance


BANKS WILL COLLECT MORE THAN $30 BILLION IN OVERDRAFT FEES THIS YEAR. HERE’S HOW
TO AVOID THEM

Published Tue, Dec 1 20202:31 PM ESTUpdated Tue, Dec 1 20205:31 PM EST
Annie Nova@AnnieReporter
WATCH LIVE
ShareShare Article via FacebookShare Article via TwitterShare Article via
LinkedInShare Article via Email
Key Points
 * In March, federal regulators encouraged banks to waive their overdraft fees
   amid the public health crisis.
 * Instead, the average penalty has reached a record high of $33.47, according
   to a recent survey by Bankrate.com.
 * And checking account providers are expected to take in more than $30 billion
   in revenue from the fees in 2020.

Overdraft fees are at all-time highs amid the pandemic.
Ivan-balvan | iStock | Getty Images

When the coronavirus pandemic brought American life to a halt in mid-March, Erin
Madden was furloughed from her job as a bartender at Hollywood Burbank Airport
in California. Difficulty finding new work and a delay in her unemployment
benefits caused her checking account to drop into the negative.

Her bank, Wells Fargo, dinged her multiple overdraft fees of $35.



“Every penny has mattered this year, so it was really depressing to have to
throw $70 out the window,” said Madden, 28. “The amount they charged me would
have been enough for two weeks’ worth of groceries.”

More from Personal Finance:
Here’s what to do before making a charitable donation
Anti-spending movement gains speed ahead of the holidays
Pandemic sends most young adults home to mom and dad

In March, federal regulators encouraged banks to waive their overdraft fees amid
the public health crisis that has caused unemployment to soar. Instead, the
average penalty has reached a record high of $33.47, a recent survey by
Bankrate.com found. And checking account providers are expected to take in more
than $30 billion in revenue from the fees in 2020, according to data provided to
CNBC by financial research company Moebs Services.

In a statement, a spokesman for Wells Fargo said, “Since the start of the
pandemic, Wells Fargo has provided financial access, guidance and support to
customers experiencing hardship, including millions of fee waivers,
overdraft-related fee reversals and payment deferrals, along with other forms of
assistance.”

Erin Madden
Source: Erin Madden

Yet, while many banks came out early in the pandemic with policies to help
customers, including waiving overdraft fees, many of those relief measures have
now ended, according to Ken Tumin, founder and editor of DepositAccounts.com.



“With job losses that are still high, the finances of many households are still
under pressure,” Tumin said. “That has resulted in more consumers being hit with
overdraft fees.”

Banks will generally charge you an overdraft fee when you make a purchase or get
dinged with a scheduled bill that exceeds the money you have in your checking
account at the time. Even before the pandemic, each year, about a third of
checking accounts, or around 120 million, went into the negative at some point,
Moebs Services found. 

> Every penny has mattered this year, so it was really depressing to have to
> throw $70 out the window.
> Erin Madden
> unemployed bank customer

The fees can rack up quickly. The Consumer Financial Protection Bureau found
that 5% of checking account holders overdraft more than 20 times per year.

Dire consequences can follow, said Alex Horowitz, senior research officer at The
Pew Charitable Trusts’ consumer financial project.

“Heavy overdrafters are more likely to leave the banking system, either
voluntarily closing accounts to avoid fees or having them closed involuntarily
because they have large negative balances,” Horowitz said.

If you’ve been hit with an overdraft fee, Tumin said, your first step should be
to call your bank and try to get it reversed. Explain what you’re going through.

“If it’s the consumer’s first overdraft and the consumer is a long-time
customer, the bank is more likely to refund the fee,” he said.


HOW TO AVOID THE FEES GOING FORWARD

Banks are required to get your permission to charge you overdraft fees.

You can decide not to enroll in their “overdraft protection” program, or, if you
knowingly or unknowingly signed up previously, you can ask to opt out at any
time, said Peter Smith, a senior researcher at the Center for Responsible
Lending.

That way, your debit card will just be declined when you try to make a purchase
with an account that doesn’t have enough money in it. However, keep in mind:
Most banks will still charge you overdraft fees on recurring bills.

watch now
VIDEO0:0000:00
Ramit Sethi: Here’s how to get the better of overdraft fees
Money


Some banks offer programs in which you can link a credit card or savings account
to your checking account, so that if you buy something that exceeds the funds in
your checking account, it’ll pull money from the other options. Ask your bank if
you can do so.

People are also less likely to make purchases that could trigger the fees if
they sign up to be alerted by their bank when their checking account has dipped
below a certain amount, Tumin said.

Meanwhile, some banks offer “overdraft-free accounts,” Smith said. Wells Fargo
offers an account with no such charges.


TV
Squawk BoxWATCH LIVEWATCH IN THE APP
UP NEXT | Squawk on the Street 09:00 am ETListen
TV
Squawk BoxWATCH LIVEWATCH IN THE APP
UP NEXT | Squawk on the Street 09:00 am ETListen

Trending Now

 1. U.S. delivers angry rebuke of massive OPEC+ production cut — and it could
    backfire for Saudi Arabia
    
 2. I tried McDonald’s new adult Happy Meal—here’s why I won’t be getting it
    again
    
 3. Here’s what might happen the second—or third—time you get Covid, experts
    say: ‘There’s no guarantee’
    
 4. Spurning annexations, Ukraine reclaims even more territory; Russia launches
    strikes on Zaporizhzhia
    
 5. Sweden says investigation into Russian pipeline leaks strengthens suspicion
    of ‘gross sabotage’
    




 * Subscribe to CNBC PRO
 * Licensing & Reprints
 * CNBC Councils
 * Supply Chain Values
 * CNBC on Peacock
 * Join the CNBC Panel
 * Digital Products
 * News Releases
 * Closed Captioning
 * Corrections
 * About CNBC
 * Internships
 * Site Map
 * Manage Cookie Preferences
 * Careers
 * Help
 * Contact

 * 
 * 
 * 
 * 
 * 
 * 
 * 

NEWS TIPS

Got a confidential news tip? We want to hear from you.

Get In Touch

ADVERTISE WITH US

Please Contact Us

CNBC NEWSLETTERS

Sign up for free newsletters and get more CNBC delivered to your inbox

Sign Up Now

Get this delivered to your inbox, and more info about our products and
services. 

Privacy Policy|Do Not Sell My Personal Information|CA Notice|Terms of Service

© 2022 CNBC LLC. All Rights Reserved. A Division of NBCUniversal

Data is a real-time snapshot *Data is delayed at least 15 minutes. Global
Business and Financial News, Stock Quotes, and Market Data and Analysis.

Market Data Terms of Use and Disclaimers

Data also provided by






COOKIE SETTINGS

We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking
“Allow All”, you consent to our use of these Cookies. Click on the Cookie
categories or the “Detailed purpose descriptions” below to learn more about
these Cookies. We will also use other Cookies that are essential for our site
and Services, including for security and fraud prevention. To learn more about
some of our partners, see the List of IAB Vendors below. Visit our Cookie Notice
and Privacy Policy to learn more.
Allow All


MANAGE CONSENT PREFERENCES

STRICTLY NECESSARY COOKIES

Always Active

These Cookies are required for Service functionality, including security and
fraud prevention, and to enable any purchasing capabilities. You can set your
browser to block these Cookies, but some parts of the site may not function
properly.

Non-IAB Cookies‎

ENSURE SECURITY, PREVENT FRAUD, AND DEBUG

Always Active

Your data can be used to monitor for and prevent fraudulent activity, and ensure
systems and processes work properly and securely.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

TECHNICALLY DELIVER ADS OR CONTENT

Always Active

Your device can receive and send information that allows you to see and interact
with ads and content.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab

STORE AND/OR ACCESS INFORMATION ON A DEVICE

Store and/or access information on a device

Cookies, device identifiers, or other information can be stored or accessed on
your device for the purposes presented to you.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

PERSONALISED ADS, AND AD MEASUREMENT

Personalised ads, and ad measurement

 * SELECT PERSONALISED ADS
   
   Switch Label
   
   Personalised ads can be shown to you based on a profile about you.

 * MEASURE AD PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of ads that you see or interact with can be
   measured.

 * CREATE A PERSONALISED ADS PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   ads that are relevant to you.

 * SELECT BASIC ADS
   
   Switch Label
   
   Ads can be shown to you based on the content you’re viewing, the app you’re
   using, your approximate location, or your device type.

 * TARGETED ADVERTISING COOKIES
   
   Switch Label
   
   These Cookies are used to collect data about your browsing habits, use of the
   Services, your preferences, and your interaction with advertisements across
   platforms and devices for the purpose of delivering targeted advertising
   content, both on our Services and on third party sites. Third-party sites and
   services also use Targeting Cookies to deliver content, including
   advertisements relevant to your interests on the Services. If you reject
   these Cookies, you will see less relevant advertising.

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

PERSONALISED CONTENT, CONTENT MEASUREMENT, AUDIENCE INSIGHTS, AND PRODUCT
DEVELOPMENT

Personalised content, content measurement, audience insights, and product
development

 * DEVELOP AND IMPROVE PRODUCTS
   
   Switch Label
   
   Your data can be used to improve existing systems and software, and to
   develop new products

 * SELECT PERSONALISED CONTENT
   
   Switch Label
   
   Personalised content can be shown to you based on a profile about you.

 * APPLY MARKET RESEARCH TO GENERATE AUDIENCE INSIGHTS
   
   Switch Label
   
   Market research can be used to learn more about the audiences who visit
   sites/apps and view ads.

 * CREATE A PERSONALISED CONTENT PROFILE
   
   Switch Label
   
   A profile can be built about you and your interests to show you personalised
   content that is relevant to you.

 * MEASURE CONTENT PERFORMANCE
   
   Switch Label
   
   The performance and effectiveness of content that you see or interact with
   can be measured.

 * CONTENT SELECTION COOKIES
   
   Switch Label
   
   This group is so Content Selection IAB group can have an id

List of IAB Vendors‎ | Detailed Purpose Descriptions Opens in a new Tab
Non-IAB Cookies‎

SOCIAL MEDIA COOKIES

Social Media Cookies

These Cookies are set by social media platforms on the Services to enable you to
share content with your friends and networks. Social media platforms have the
ability to track your online activity outside of the Services. This may impact
the content and messages you see on other websites you visit.

Non-IAB Cookies‎


BACK BUTTON PERFORMANCE COOKIES



Vendor Search Search Icon
Filter Icon

Clear
checkbox label label
Apply Cancel
Consent Leg.Interest
checkbox label label
checkbox label label
checkbox label label


 * 33ACROSS
   
   HOST DESCRIPTION
   
   VIEW COOKIES
   
   
    * Name
      cookie name

Confirm My Choices


We and our partners collect information from your device, such as device
identifiers, IP address, and your browser type to personalize and deliver
content, marketing and advertising—across devices and platforms; for analytics
and measurement, so we can improve our services and develop new ones; to match
and combine offline data with your online activity; and for social features. We
share this information with selected partners with your consent. By clicking “I
accept”, you consent to our use of these Cookies. Click Manage Choices to learn
more about these. We will also use other Cookies that are essential for our site
and Services, including for security and fraud prevention. To learn more about
some of our partners select Show Vendors. You can adjust your preferences at any
time via the “Manage Cookie Preferences” link in the footer of relevant
NBCUniversal websites or in-app settings. Visit our Cookie Notice and Privacy
Policy to learn more.


WE AND OUR PARTNERS PROCESS DATA FOR THE FOLLOWING PURPOSES:

Store and/or access information on a device. Personalised ads, and ad
measurement. Personalised content, content measurement, audience insights, and
product development. List of IAB Vendors

I Accept Manage Choices