This Is How Much We're Paying in Overdraft Fees

This Is How Much We're Paying in Overdraft Fees

Ever take a look at your bank statement and think - ouch! - when did I get hit with that overdraft fee?!

A lot of us are the same boat: Consumers coughed up more than $34 billion in overdraft fees last year, according to a MarketWatch report on data from financial research firm Moebs Services. That's the most the country has paid since 2009.

But that stat doesn't necessarily mean we're getting worse at keeping track of our balances. The research also points out that overdraft fees have gone up - in 2000, you'd pay $20 on average. Today it's $30. Credit union fees have gone up from $15 in 2000 to $29 now.

Also not helping the cause: Some financial institutions auto-enroll you in overdraft protection services, which means they'll cover a transaction if you have insufficient funds in exchange for that hefty fee. But a lot of consumers would probably be better off just getting declined than going through with a purchase they don't have the money for. The Consumer Financial Protection Bureau puts it this way: Let's say you were charged a $34 fee for being overdrawn by $24, and it took you three days to pay that overdrawn amount back - that's the same as taking out a loan with a 17,000% annual percentage rate.

The bottom line is, try to avoid overdraft fees in the first place. Revisit how much you should keep in your checking account to ensure you always have a decent buffer. Sometimes, you're so stressed about saving enough or paying down debt that you don't leave yourself enough to cover all your bills. If that's the case, you might have to rethink how you budget your take-home pay.

Need some more help making sure those overdraft fees don't catch you off guard? Here are a few more tips to nip the problem in the bud.

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