Pay Overdraft Fees

Many Americans are living paycheck to paycheck, and any type of additional charge or emergency bill can make juggling finances a struggle. It is the small day to day expenditures which create more banking errors creating the influx of bank fees. Pricey fees for small mistakes cost Americans billions of dollars each year.



Shuffling transaction order is one way that some banks are creating multiple fees. At the end of a business day, the transactions are subtracted from your balance and any overdraft charges will be placed. Standard practice is to subtract the transactions in the order in which they occurred. At 10 am you bought a coffee and Danish for $6, at 1 pm you spent $18 for lunch, oil change on the way home was $75, and the last-minute stop for groceries was $35. If you only had $100 in your bank, you would be charged a fee for your last charge. Some financial institutions have abused this system by reordering transactions to subtract from high to low. This would make the $75 charge first and your groceries of $35 second with an attached overdraft fee. Let’s not forget that there were two other charges on your account that day. There would be additional overdraft fees for each of those as well. That bank just collected fees three times in one day by rearranging the order of your transactions. A person who is stretching their dollar to the next paycheck will be facing additional problems as a result of this practice.



A disconcerting fact that banks collected almost $60 Billion in overdraft fees in 2019 is staggering. Programs to protect accounts from overdraft fees cost money as well. People are confused as to how to best protect themselves from these additional charges. Banks can report that they have lost money in overdraft charges from years in the past, but they found their way around that by charging for protection.