Bank Overdraft Revenue Rises To $31.5 Billion

From ABC News Consumer Reports blog

Another telling consumer banking report was released this week, this time showing that checking account overdraft fee revenue increased to $31.5 billion for the last fiscal year.

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If you are wondering why this is such a big source of revenue for banks, I reviewed an article about how some people have so much trouble in balancing their checkbooks. One solution for those who often make this mistake is to switch to internet banks which don't charge overdraft fees. Bank of Internet USA recently ended overdraft fees for its Rewards Checking account. ING DIRECT has never had an overdraft fee for its Electric Orange account. It should be noted that the customers will still have to pay interest for the negative balance, and unlike the deposit rate, that interest rate is high. So the best approach is to make sure the checkbook remains balanced.