Not having any money is bad enough, but it only adds insult to injury when you check your bank account balance, and it shows you a negative number, so you can see exactly how much less than nothing you have.  The indignity of having an overdrawn bank account does not end as soon as you get your paycheck, though.  If your employer deposited $500, but you only got $487 because of your $13 overdraft, that would be bad enough, but it gets worse.  Your bank charges a $28 overdraft fee, so now you only have $459, and the bills are starting to come due again, so in all likelihood, the cycle will repeat itself in this pay period, too.  Overdraft fees are just one of the many indignities of living from paycheck to paycheck, and despite a brief glimmer of hope last year, it looks like the growing number of Americans who are fortunate enough to have bank accounts but not fortunate enough to have enough money to maintain a positive balance in the account will be paying overdraft fees for the foreseeable future.  If you were struggling to pay your bills even before your bank assessed this round of overdraft fees, contact an Oakland lawsuits, collections, and creditor harassment lawyer.

What Are Overdraft Fees, and Why Do They Still Exist?

A negative balance in your bank account is called an overdraft.  Overdrafts are increasingly common these days, now that people make so many transactions by swiping their cards and entering their card numbers online to finalize a purchase, and especially with pre-scheduled automatic debits and with app purchases linked to debit cards.  Banks have the right to charge overdraft fees, and there is no official limit to how much they can charge.  In 2024, the average overdraft fee is $28.  Last year, a law went into effect promising to limit overdraft fees to $5, but that law has been revoked, so overdraft fees are here to stay.

Meet the Desperate People Who Willingly Incur Overdraft Fees

While no one likes paying overdraft fees, some people would rather pay them than face worse consequences.  If you only have $80 in your bank account, you might pay your $140 energy bill if the alternative is getting your electricity turned off and then having to pay to reconnect it.  An overdraft fee is chump change compared to defaulting on your car loan and getting your car repossessed.

How to Avoid Overdraft Fees

Your bank might offer overdraft protection.  The most common form is linking your checking account to your savings account, so that if the funds in your checking account are not enough to cover a transaction, the bank automatically takes the difference from your savings account.  Some banks even let you use a credit card as overdraft protection.

Contact the Law Office of Melanie Tavare About Avoiding Overdraft Fees

A debt relief lawyer can help you if you are among the many consumers for whom overdraft fees are a regular occurrence.  Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.