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Overboard on Overdrafts
Some of the major players in the banking industry are increasing their overdraft fees and limiting their employees on the number and amount that they can refund. Most of the changes in price are from $2 to $5; however, the really expensive part is that they've increased the number of times you can get hit per day.
For example, Bank of America had a first time overdraft increased from $20 to $25. They've also changed the number of times per day a person could be charged that $25—up to seven times (previously, you could be hit a whopping five times.) That's $175 in fees in just one day for consumers who overdraw their account multiple times a day.
Banks are also making it easier to fall into fees. More and more are switching debit cards to instant processing so that it clears immediately and they can collect a fee if the funds are not available. With Bank of America, customers used to be able to make a deposit to cover the transactions before they cleared and avoid a fee. Not anymore.
Bank of America isn't the only one making changes, either. Wachovia and Washington Mutual have also jacked up the overdraft fees. We're going to avoid the lecture on personal responsibility in managing your money and just say that this straight up sucks. It's hard enough to have more money; the last thing people need is to get hit with fees again and again. Still, the best thing you can do is to keep it simple—pay in cash when possible (hey, it will help you decide if you really need that new pair of kicks) and be doubly sure you can cover your withdrawls.
Have you run into problems with your bank on overdraft fees? How difficult was it to get them taken care of, especially if it was bank error? [USA TODAY]