Budgeting, saving money should be goal for people with lower incomes
Those with lower incomes do have options when it comes to their banks and overdraft fees.
Liz Pulliam Weston, a columnist with the Los Angeles Times, suggests that lower-income consumers need to plan better, which includes budgeting and saving money. Doing so will create a buffer for the consumer.
Though she agrees that banks are being hard on consumers when it comes to fees, there are things consumers can do. Rather than being stuck with “courtesy overdrafts,” Pulliam Weston suggests consumers sign up for other programs offered by banks.
“[The consumer] can sign up for true overdraft protection instead of ‘courtesy overdraft’ or ‘bounce protection’ and set up a balance-monitoring system that alerts [them] when [their] funds are low,” Pulliam Weston wrote.
As banks struggle to try and make up for lost income from credit card fees and delinquent accounts, many are turning to courtesy overdrafts to pull in additional income. Courtesy overdrafts are charged when a bank puts through a transaction even though an account can’t cover the cost. The bank then charges a fee for doing so.
Recent reports indicate banks could stand to make $38.5 billion from overdraft fees this year.