If you aren’t keeping track of every debit and credit to your bank account, you are playing financial Russian roulette in the form of an overdraft fee. Even banks with overdraft credit facilities charge high interest and fees for using this provision. And, it may not stop with a single insufficient funds fee for a rejected payment. If you make several transactions with a negative balance, you could be on the hook for several hundred dollars.
Although you may be lucky because some banks don’t charge an overdraft fee if the overdrawn amount is $5 or less by the end of the banking day, do you want to take that risk? Take a look at this list of banks and their overdraft fees. Is your bank there?
| Financial Institution | NSF Fee (per Bounced Check) | Max. Fees (per Day) | Total Possible Cost (per Day) |
|---|---|---|---|
| Alliant Credit Union | $28 | No Limit | No Limit |
| Ally Bank | $25 | 1 | $25 |
| Associated Bank | $35 | 4 | $140 |
| Bank of America | $35 | 4 | $140 |
| BB&T | $36 | 6 | $216 |
| BBVA | $38 ($32 in CA) | 6 | $228 ($192 in CA) |
| Chase | $34 | 3 | $102 |
| Citibank | $34 | 4 | $136 |
| Citizens Bank | $35 | 7 | $245 |
| Comerica | Up to $38 | 5 | Up to $190 |
| Fifth Third Bank | $37 | 5 | $185 |
| HSBC Bank | $35 | 3 | $105 |
| Key Bank | $39 | 5 | $195 |
| M&T Bank | $38.50 | 5 | $192.50 |
| Navy Federal Credit Union | $20 | 3 | $60 |
| PNC Bank | $36 | 4 | $144 |
| Regions Bank | $36 | 6 | $216 |
| Santander Bank | $35 | 6 | $210 |
| Sun Trust | $36 | 6 | $216 |
| TD Bank | $35 | 5 | $175 |
| Union Bank | $33 | 5 | $165 |
| USAA | Up to $29 | 3 | $87 |
| U.S. Bank | $36 | 4 | $144 |
| Wells Fargo | $35 | 3 | $105 |
Why an Overdraft Is Not a Good Idea
Each line of credit has advantages and disadvantages, and for overdrafts, the disadvantages outweigh the merits. So, if your checking account is at a bank with overdraft fees, keep an eye on your account to avoid the penalties that come with overdrawing your account.
The drawbacks of an overdraft include:
- High interest rates. In addition to an insufficient funds fee, your bank can charge interest on overdrawn amounts – often over 20%.
- Low borrowing limits. A bank offering an overdraft credit facility allows you to borrow money but is not an alternative to a regular personal loan. Its borrowing limits are significantly lower than loans. Also, the law allows a bank with overdraft lending to charge you more fees if you exceed the overdraft limit without authorization.
- It can become a habit. Users quickly develop the overdraft effect, which is the habit of constantly relying on the bank overdraft and, most often, not paying it back. It results in interest and insufficient funds fees piling up, which could pull you down financially.
- Overdrafts can be secured against your assets. If you rack up a significant overdraft debt, including the fees and penalties, you may lose your assets to the bank.
While it appears safe to carry a bank account with an overdraft facility provision, know that it may take only one simple oversight mistake for this debt facility to bring you down financially. It’s safer to seek alternative funding sources to cover your expenses and keep your checking account from having a negative balance.
Get a Minute Loan Center Loan
To protect your account from incurring an insufficient funds fee, apply for a loan from Minute Loan Center and deposit the money to your account. Doing this will ensure that there’ll always be money to pay your urgent expenses in case your money is delayed or you lose your job. Our loans are affordable and have flexible, easy repayment terms. Contact us for more information and apply for a loan today!
Kevin brings over 15 years of experience in marketing, with a specialized expertise in growing online businesses. As the Director of Marketing at a leading FINtech company, he employs innovative strategies to enhance brand visibility and customer engagement. Kevin’s passion lies at the intersection of technology and finance, where he pioneers solutions that not only meet but exceed consumer expectations. His commitment to leveraging his expertise ensures impactful results and the building of lasting relationships in the digital landscape.
