Fewer than one-quarter of consumers who were hit with an overdraft fee in the past year were expecting it, according to research published last week by the Consumer Financial Protection Bureau. Overall, about 25% of all consumers who participated in the CFPB’s survey had been charged an overdraft or NSF fee in the past year.
By The Numbers: Perhaps not surprisingly, there appears to be a correlation between individuals who incur overdraft or NSF fees and those who have problems paying their bills. Among those that incurred an overdraft or NSF fee, 81% had difficulty paying at least one bill, compared to 25% of households that were not charged such a fee.
- More than 40% of consumers were surprised when learning of their latest overdraft fee, according to the CFPB’s research. Not surprisingly, the less that a consumer incurs an overdraft fee, the more surprised that consumer tends to be when it happens. Among households that were charged for more than 10 overdraft fees, 56% of those consumers expected it to happen.
- Only 10% of households making more than $175,000 per year incurred an overdraft or NSF fee, compared with 34% of consumers living under $65,000 per year in income.
Other Options Available: Of those households that incurred between one and three overdraft fees, 68% of them had space on a credit card to use instead, which would be cheaper than incurring the cost of an overdraft fee.