An overdraft fee, also known as an NSF (Non-Sufficient Fund) fee, is a penalty your bank charges when you make a payment that exceeds the available balance.
Banks take advantage of your insufficient funds and approve transactions you can’t afford. They then charge a fee for this transaction with the sole aim of making a profit off you. They do this by deducting the money plus the overdraft fees the next time you deposit funds.
This post discusses the legality of overdraft fees and highlights the best ways to fight them.
Are Overdraft Fees Legal?
Some transactions, like ATM withdrawals and debit card transactions, require you to consent to the overdraft fees before your bank charges you. These transactions are covered under overdraft coverage programs as required by Federal Law.
If you opt out of overdraft coverage, your bank should not charge an overdraft fee. Instead, your bank will refuse the transaction when you run out of money.
How to Fight Overdraft Fees
You can fight overdraft fees by following the steps below:
Opt Out Of Overdraft Coverage
The most effective way to fight overdraft fees is to opt out of overdraft coverage.
When you opt out of overdraft coverage, your bank will decline transactions when the available balance in your account cannot cover the transaction instead of accepting the charge and penalizing you afterwards.
Keep Track Of Your Account Balance
You can avoid overdraft fees by downloading a banking app that lets you keep close tabs on your account balance. Your banking app also allows you to set account alerts that notify you when your balance is running low.
You can also ask for regular bank statements to keep you in the know of your current account balance. This regular checking is also a great tool to help you budget appropriately.
Link To A Credit Card Or Savings Account
Link your checking account to a savings account or a credit card. When you do not have enough money to cover a transaction, your bank automatically transfers money from the linked account, preventing bounced checks and other unfortunate situations.
Get A Prepaid Debit Card
Getting a prepaid debit card can help fight overdraft fees because you can set your own spending limits. Prepaid cards will only work when you preload money first.
You can deposit, withdraw, and spend money using your prepaid card. However, the cards are not linked to checking accounts, which is great because your bank cannot overdraft a prepaid debit card.
Fight overdraft fees, legally
Many customers who feel their banks have taken money from them illegally have gone to court about it. Most have, however, yet to be successful because of the influence of the big banks and corrupt politicians. Fortunately, some lawyers and law groups are making great strides in holding the big banks accountable. talk to a professional lawyer to help you with your case.
Keep Your Money Safe From Greedy Banks
Logging into your bank account and seeing your balance in red is one of the worst feelings ever. Was it the $10 quesadilla that put you over the edge? Or your bank charged a fee unexpected to you, creating a negative balance. In case you feel the banks illegally took your money, talk to a reputable lawyer or law group and have your case presented before a court. don’t get intimidated by the greedy banks, join a lawsuit today and let your hard earned cash get returned to you.