According to a new report from The PEW Charitable Trusts, overdraft fee programs in the United States "are often marketed as a service that banks provide to cover occasional budgeting errors, but in practice they are not well understood by consumers and often fail to meet their needs.
Are Overdraft Fees Costly and Inefficient Credit Lines?
According to a new report from The PEW Charitable Trusts, overdraft fee programs in the United States "are often marketed as a service that banks provide to cover occasional budgeting errors, but in practice they are not well understood by consumers and often fail to meet their needs."
The study found:
- Nearly 3 in 4 overdrafters do not understand that they have the right to have transactions declined without a fee if their account does not have sufficient funds to cover a debit card purchase.
- Banks’ communication about overdraft programs is ineffective.
- Even among customers who have had a conversation with their bank, understanding of overdraft programs is low.
- One in 3 overdrafters treat bank programs as a way to borrow small amounts of money.
- Most overdrafters face significant financial stress, and many have inadequate access to safe and affordable credit products.
About Capital Area Asset Builders
Capital Area Asset Builders (CAAB) is a non-profit organization whose mission is to empower low- and moderate-income residents of the Greater DC Area to take control of their finances, increase their savings, and build wealth for a better future.
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