America’s three largest banks – JPMorgan Chase, Bank of America and Wells Fargo earned more than $6 billion just from ATM and overdraft fees last year – this according to an analysis by SNL Financial and CNNMoney.
That equates to twenty five dollars for every adult in the U.S. According to Bankrate, consumers now pay more than four dollars on average to withdraw their own money from an out-of-network ATM. While ATM fees often receive the most attention, overdraft charges are the most profitable for banks.
America’s big three banks made more than five billion dollars last year from overdraft fees alone. A twenty fourteen Pew study found that more than half of the people who overdrew their checking accounts in the past year didn’t consent to their overdraft service.
The typical overdraft fee is thirty four dollars. That’s remarkable given the fact that a Consumer Financial Protection Bureau found that the majority of overdrafts occur on transactions of twenty four dollars or less.
The same source goes on to note that if someone effectively borrows twenty four dollars for only three days and pays an overdraft fee of thirty four dollars to their bank, the bank’s annual percentage rate or APR is equivalent to seventeen thousand percent.
