Overdraft fees drop to 13-year low, while ATM fees climb
PHOENIX (3TV/CBS 5) — Overdraft fees are falling, according to a new Bankrate report, examining banking fees. “They’ve increased in 21 of the past 23 years, but this year, we have seen a change and pretty notably so,” said Greg McBride, the company’s chief financial analyst. “We have seen many of the larger banks, in particular, dialing back their reliance on overdraft fees, instituting policies either with lower fees, higher thresholds before the fee is triggered, or in some cases just walking back that fee altogether.”
According to the report, the current average overdraft fee is down 11% from last year to $29.80, marking a 13-year low. “Overdraft fees have been in the regulatory and the legislative crosshairs for some time, and that pressure has continued to build, so what you’re seeing is particularly among the larger banks, they’re imposing some changes on their terms as opposed to having the changes imposed on them,” McBride said.
Though overdraft fees are on the decline, they can still add up quickly, so here’s what you need to know to avoid the costly charges. “Set up a link between your checking and your savings accounts,” McBride suggested. “That way if you slip up, it’s your money and not the bank’s money to cover the shortfall. Sign up for email and text alerts. These can let you know when your balance gets below a certain level, so that you can proactively move money into the account.”
It’s also important to check your available balance versus your current balance before you make a purchase or pay a bill. “The check that you deposited yesterday may not be available for immediate withdrawal so you may need to look at the app and see how much of your current balance is available,” McBride noted.
Bankrate also examined ATM fees. The average combined cost of an out-of-network ATM transaction was $4.66, according to the report. Phoenix is in the top three most expensive cities for using an out-of-network ATM at an average of $5.24. Average ATM fees in Los Angeles are $4.21.
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