Debit Card Fees Have Some Re-Thinking Credit Cards
| September 9, 2009 |
Recently I read an article in the New York Times entitled "Overspending on Debit Cards is a Boon for Banks". The article started off with a gentleman from Colorado who was charged two hundred and thirty eight dollars by his bank in overdraft fees in a single day. Although none of his purchases were over seven dollars he was hit with a thirty four dollar overdraft fee on each purchase. The worst thing about it, he had put money in his bank account a couple of days earlier and it had not processed by the time he went shopping.
As you may already be aware, this case and many like it have been occurring for sometime now. However as more people have chosen to move to debit cards and checks as a primary way of making payment, overdraft fees have increased causing many people to rethink credit cards as a viable payment option.
For a long time now, many banks have marketed debit cards as a convenient and easy way to make purchases, but now consumers are finding that the cost could be far more than those involved with credit card usage. In fact, according to a study by FDIC, in 2009 banks are estimated to make roughly twenty-seven billion dollars on overdrafts fees connected to checking accounts. This is slightly higher than a little over twenty billion estimated in penalty fees from credit cards usage.
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