NORTHAMPTON, Mass. (WWLP) – More young people living paycheck to paycheck are having to pay costly overdraft fees. The truth is overdraft protection does little to protect you.
If you withdraw more than the available balance of your account, overdraft protection will only save you the embarrassment of having your purchase denied, while whacking you with a fee that can be as high as $35.
The 628 largest banks made a combined $11-billion from overdraft fees in 2015 and there’s no federal regulation on how much they can charge and how many times.
The Five College Credit Union told 22News you should set up email or text alerts to warn you when your account balance is low, or when you have overspent in a certain purchase category.
Jon Reske, Vice President, Marketing, Five College Credit Union said, “You can opt out of overdraft at an ATM or at point of sale with a debit card. Which means, instead of it going through and you getting charged, it simply won’t go through. You didn’t have the money anyway, so you are better off not to make that purchase.”
The Five College Credit Union also told 22News you may want to set up a small line of credit that connects your checking account to your savings account so when you overdraw one account, it pulls from the other.