Almost everyone has been there at some point in their life. You stop for coffee from your favorite barista, and what you don’t know is you just purchased a mocha latte grande for $42.00.Somewhere you made a slight error in your bank account, and are now the proud owner of a really expensive caffeine fix. Ouch. We all make mistakes and a simple oversight in your checking account may trigger an overdraft fee – sometimes more than one.
Overdraft Fees 101
Overdraft fees occur when you make purchases or withdrawals from your bank account without having the available funds to cover the transaction. When an overdraft happens the bank approves the transaction as though the funds were actually there, and as a result, you now have a negative balance in the amount of your purchase, plus the cost of the overdraft fee incurred.
Overdraft fees vary, but the national average is approximately $30.00-$35.00 per occurrence. There are banks that offer overdraft protection coverage, so if your account is short, money will be transferred to cover the cost from a previously linked and funded account. Depending on your bank you may, or may not incur a fee for the transfer of funds on the overdraft protection.
Remember, each purchase you make causing an overdraft to your account means yet another overdraft fee. For example, if you go shopping and make three different purchases you have a potential overdraft fee of $90.00-$105.00 plus the amount shown on your receipt. That can get very expensive, very quickly. Additionally, banks have the option of charging you a “continuously negative balance fee” until you cover the deficit in your account. By now you must be asking yourself, “Can I fight overdraft fees”?
Overdraft Protection Act Of 2021
The Overdraft Production Act of 2021 stopped banks from engaging in deceptive practices involving overdraft coverage amongst other issues. Banks that cover your charges for an overdraft fee must disclose the amount they are charging you. They also have the right to decline your purchase if you don’t have sufficient funds in your account. In addition, you cannot be charged a fee if they decline the transaction.
Your bank is now required to notify you promptly when you have overdrawn your account to avoid additional fees, and give you the opportunity to correct your negative balance. The number of overdraft fees you can be charged in one month, and year are limited, and those fees must be reasonable. As of 2022, many banks are now actually lowering their fee schedules.
Get Your Ducks (Or Bucks) In A Row
Knowing how to ask, as well as who to ask, is important. Be proactive if you decide to fight overdraft fees by contacting your bank immediately when notified of an issue. Next, take a few minutes to gather any notices or bank statements relevant to the issue.
Here are a few helpful tips below:
- Make a list of all of the fees that you have been charged from your current bank statement. Be sure to jot down what type of fee, the date the fee was charged, and the amount.
- Locate the customer service number for your bank, or in some cases, open a secure chat line directly from their website.
- Get to the point. Be polite, but direct in your request to have the fees reversed or waived. They are not interested in how it happened, just that it happened.
- If you don’t succeed at first, nicely, request to speak to a supervisor. Often you just need to ask the right person.
Having Overdraft Fees Reversed
Yes, you can fight overdraft fees. Any banking institution can reverse overdraft fees, the real question is, will they? Your best bet for getting overdraft fees reversed, including overdraft transfer fees, is to ask. By simply asking, some banks will waive an overdraft fee, sometimes more than one, if you ask nicely. Banks will often consider the length of time you have done business with them in their decision on waiving fees.
The longer you have been a customer in good standing, the better chance you have of getting the fee waived or reversed. Having multiple accounts with the same bank is also leverage for getting rid of fees associated with overdrafts. If you have a credit card, savings account, certificates of deposit, or other investment accounts you have a little more wiggle room on asking for favors. Don’t be intimidated if you believe that your bank owes you an adjustment in overdraft fees. It may be easier than you think to fight overdraft fees successfully.