the Price of Overdraft Fees

The service I am paying for is a bank checking account. It is avertised a "free checking" which is basically the case. For day-to-day transactions there are no fees or charges except the requirement to purchase checks when the supply runs out. The other fee I encounter although it is seldom is an overdraft charge which is the subject I am addressing below. The payment broke down into two parts, (1) a basic charge for the overdraft of $26 and a $5/day charge until the overdraft situation was rectified.

The quality of the service was to me in this case unsatisfactory. I have had an overdraft situation three times in the past seven years. The first time the fee was waived, that being the bank's policy. The second and third time the two=part fee was paid. I've considered the $26 fee high, though not necessarily excessive, only because my overdraft was in each case less than one dollar. The primary reason for my disatisfaction is that the bank notifies its customers of overdraft situations by mail in which case the daily O/D fee can add up until the letter is received an acted upon. I would be much happier if the bank would phone and give me the opportunity to fix the O/D problem the same day if possible. My dissatisfaction has more to do with the process than with the dollar amount.

Check with your bank to see what their overdraft policy is. Check to see if the fee can be waived if you correct the problem the day on which the overdraft occurs and if the bank will attempt to contact you immediately in case of an overdraft. Some institutions (my credit union being one example) will transfer fruns from savings or a line of credit to cover an overdraft. This of course should not be taken as an excuse to be careless about managing your checking account, but is a nice feature worth looking into.