Half of bank customers choose checking account overdraft protection, American Bankers Association survey says.
August 31, 2010
Despite all the advice from personal finance experts to choose inexpensive ways to cover accidental checking account overdrafts, a lot of folks are apparently willing to pay 25 to 35 bucks a pop to ensure their debit card transactions go through when their balances are zero.
Almost half of bank customers, 46 percent, said they will, or already did, opt in for their bank's overdraft program and were willing to pay the attached fees, according to a new survey for the American Bankers Association.
"These results show that many bank customers value debit card overdraft protection and are willing to pay for the service," ABA Vice President Nessa Feddis said a press statement. "They are now in the driver's seat and control the way their accounts are managed."
New checking account debit card overdraft rules in effect now
The survey, conducted by an independent market research firm, polled more than 1,000 adults by phone Aug. 14 and 15, as new federal regulations went into effect Aug. 15 requiring banks to get permission from customers before paying debit card overdrafts and charging a fee for the service. An earlier phase of the rules went into effect in July requiring them to get permission from new account holders.
Previously, banks enrolled customers in the service automatically and charged fees each time they overdrew their accounts with their debit cards. Some customers racked up several charges a day without realizing their accounts were overdrawn. New rules were written after Congress passed a law requiring banks to get permission to enroll customers in such programs. A survey by Consumer Federation of America earlier this year reported the average overdraft fee at big banks was $35.
Other, less expensive ways to cover overdrafts include linking checking accounts to savings accounts for protection or linking checking accounts to lines of credit.
