Overdraft fees hitting consumers in their wallets

07.30.09
By James Conroy

Consumers are facing a list of problems from credit card debt to trying to stop foreclosure, but a new survey finds that many people are getting hit with exorbitant overdraft fees from their banks, even if they withdraw their account by a few pennies.

According to the study from Moebs Services, the median cost of an overdraft fee at main street banks is $26, while Wall Street banks charge $35 for an overdraft.

The problem is affecting consumers who are trying to get out, or stay out, of credit card debt by using debit cards or paying by check. But people like Tracy Hickman, who told Bloomberg she paid more $300 in overdraft fees because of a $11.99 meal at Taco Bell, according to Bloomberg, say the fees are too much.

"I stopped using credit cards to keep me out of trouble and then got hit with overdraft fees," she told the news provider. "It's not fair."

In calling for the creation of the Consumer Financial Protection Agency earlier this month, the Consumer Federation of America (CFA) said these overdraft fees were costing Americans $17.5 billion.

The report from the CFA also found that Citizen's Bank had the highest overdraft fee in the industry at $39 with 14 of the 16 largest banks in the country charging $35 or more per infraction.

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Many consumers are getting hit with large overdraft fees for even tiny purchases