Banking On Overdraft Fees

The financial industry needed hundreds of billions in TARP taxpayer money so that they could charge $38 billion in overdraft fees to customers.

Banks in the United States are poised to make $38.5 billion in customer overdraft fees this year, the Financial Times said, citing research by Moebs Services.

A large portion of the revenue is likely to come from the most financially stretched consumers, according to the paper.

It said the research showed that many banks have increased charges on overdrafts and credit cards in order to boost profits.

The median bank overdraft fee rose this year by one dollar to $26, the paper said, citing the Moebs data.

Well that makes sense. If you've got $5,000 in checking account, you don't have to worry about overdraft fees, now do you?

If you're going paycheck to paycheck however, what banks will do is not deny your ATM/debit card and front you the money, your account goes negative balance, and then every time you use the card you get hit with a $25-$35 fee. So, if the check you write for a bill clears the day before payday for example and you're not watching your account like a hawk, if you go through the day obliviously using your check card you have no clue you're overdrawn until the next time you check your account and see that your morning coffee, your gas tank fill up and that trip to the grocery store end up costing you an extra hundred bucks or more.

Bankers have to get those six or seven digit bonuses from somewhere, you know. If the banks just denied your card the first time, you might not run up huge fees for them and that's not fair to the banks.

It's your fault for being poor!

Sarcasm aside, this is basically banks profiting off the people who can least afford to hand the banks a free gift every time they cut the line too close to the other side. How many of you have said "Man I hope my bill check doesn't clear today, it needs to wait until Friday." I know I have.

The fact they can get $38 billion as an industry over a year out of a $25 fee means they're hitting Americans with this over one and a half billion times a year. That's five times the population of the country. That's $125 as an average for every man, woman, and child in the country per year.

Something's wrong there.