Economic volatility coupled with rising gas and food costs have created a tough financial condition for many families across the country. As many struggle to pay their bills and make ends meet, some argue that taking advantage of their banks' overdraft privilege service has helped them overcome rough times.
Households who are living paycheck-to-paycheck may sometimes face shortfalls in their spending, with some only realizing this once they have already mailed out a check for a utility bill. These consumers argue that the fees they incur for overdrafts are often less expensive than those imposed for bounced checks, and the program still allows them to make their bill payments, according to personal finance website Helium.
Without overdraft privilege programs, some families would incur bounced check fees, in addition to returned check fees from their service providers or other merchants.
Several megabanks have increased their overdraft fees, with some averaging at $35. However, many smaller community banks and credit unions offer more affordable overdraft privilege services, with an average of $27. The Consumer Financial Protection Bureau's recent examination into overdraft charges has also sparked more opposition from legislators and bankers, who echo many consumers' sentiments that overdraft privilege programs serve as a safety net to individuals.