Consumers' Surprising Decision About Bank Overdraft Fees

American consumers prefer to pay bank overdraft fees versus having their debit card declined at the checkout or restaurant. That is the consumers' surprising decision about bank overdraft fees revealed by Moebs services survey of over 2,400 banks and credit unions. Banks have given theyr customers choices about bank overdraft protection. What did you choose to have done in your account; keep overdraft protection active on your account or have you turned it off?

Government Intervention Regarding Bank Overdraft Fee
Because Congress targeted overdraft fees, regulations were enacted by the government requiring banks and credit unions to obtain consent from existing users and all new users for debit card overdrafts and overdrafts at ATMs. The Moebs study revealed that about 75 percent of the 130,000,000 consumer checking account holders gave consent. It is better for consumers to have the choice of activating overdraft protection, but I'm sure the government suits and consumer protection gurus are perplexed that their master plan has backfired.

How To Avoid Overdraft, Low Balance And Check Cashing Fees
If you are paying $6 or more each time you cash your paycheck, or getting dinged for $25 or more per overdraft by your bank, you can take advantage of checkless banking services and save that money. Services such as these are safe and secure electronic banking services which offer all the modern conveniences of banks (including online bill pay), but without the risk of overdraft charges.

No minimum balance
No credit check
No ChexSystems check
No overdraft fees
Overdraft Protection Equals Peace of Mind

Humans are emotional animals. One emotion we tend to avoid is embarrassment. No one likes to be stuck in the checkout line walk of shame when you have bags full of groceries and your debit card gets declined or if you are on a date and the waiter has to inform you that your debit card was rejected. Uh oh. Time to wash the dishes? Instead, consumers prefer to skip the embarrassment and are happy to pay a fee in exchange for the safety net of overdraft protection.

"The consumer no longer views overdrafts as a penalty like a parking ticket, but as a safety net. This is especially true since almost 100 percent of those using overdrafts, 10 or more times in a year, and over 50 percent of those who never overdraw their account, opted in for overdraft protection," said Moebs.

Know Your Bank Lingo
Banks are master marketers. They like to come up with clever names to take the sting out of fees they charge. Overdraft fees are no exception. Many banks use the term "insufficient funds" or "non-sufficient funds" (abbreviated NSF) to describe overdraft fees. Notice the word "fee" has disappeared from that phrase. The bank marketing machine inserted the word "protection" to make overdraft fees more positive sounding. Whenever you see these terms, you need to just know that they are interchangeable. Now that you know more about consumers' surprising decision about bank overdraft fees, what have you chosen to do; opt in or opt out of bank overdraft fees?