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Summertime and the Overdraft Fees Are Not Easy

July 9, 2021

*Sigh* Feel that? It’s the feeling of the summer sun kissing your cheeks, the sand between your toes. It’s probably also the feeling of dread as another overdraft fee hits your bank account.

Cushion data shows that fees each summer tend to tick upward slightly, likely due to increased spending on summer vacations and other leisure activities, home improvement supplies, dining out, and AC bills, to name just a few.

This summer, however, overdraft fees have soared to astronomical levels. Coming off of a COVID-19 spending hiatus, Americans have a great amount of pent-up energy to get out and spend. Americans are also no longer benefiting from federally funded stimulus checks, and chances are that their banks are giving out more fees and fewer refunds.

Graph of average fees per cushion customer per month shows the dramatic rise in fees throughout the first half of 2021.

At their pandemic-lowest (April 2020), overdraft fees cost Americans an average of $33.77 per month; in June 2021, that number had risen to $103.16 — a 205% increase.

To put things into perspective, Americans pay roughly $200 billion each year in bank fees and credit card interest charges. In a perfect world, banks would waive these fees, but after a tumultuous 2020, they too are trying to keep an eye on their bottom line. This means that it’s up to you — the consumer — to be extra vigilant and take control of your finances. Reducing or eliminating overdraft fees is a good place to start.

Monitor Your Account

The easiest step to mitigating fees is to keep an eye on your account balances and charges. Legally, banks are not required to notify you if you’ve overdrafted. This oversight allows them to apply the fee and deduct money from your account without your knowledge. Not to mention, they can also charge multiple overdraft fees in a single day. Your best bet is to sign up for low-balance notifications. Most mobile banking apps offer this feature and have customizable settings, so it’s one less thing to account for.

Read more about what to do if you’re about to overdraft. 

Choose the Right Plan

If you decide to opt in to overdraft protection, you’ll need to do your research. Many plans allow you to withdraw money or make a purchase even if your account does not have the funds. Whether your bank charges an overdraft fee per transaction or links your account to a separate one or line of credit, there are always fees to be wary about.

Alternatively, you can choose not to opt into overdraft protection, or opt out at any time. If you don’t have essential bills to pay, this can save you money. In most cases, your purchase will simply be declined. 

Read more about what to know before opting into overdraft protection. 

Ask for Help

There are a couple ways to do this. First, you can go to your bank directly. Reach out and let them know that you’re struggling with overdraft fees. If you’re experiencing financial hardship as a result of COVID-19, consider mentioning this in your negotiation. Despite the United States’ seemingly rapid emergence from the pandemic, many people are still struggling, and your bank may be more willing to work with you if you’re going through a rough time or can provide them with other convincing points of leverage.

The second thing that you could do: Get help from a bank fee monitoring service. Even if you try to stay on top of your accounts alone, fees can slip under the radar. Some banks even use sneaky tactics to camouflage charges on your bank statements.

Cushion’s ⚛️ Fee Genius monitors your accounts 24/7 and is able to find and notify you about these sneaky fees. Our AI-powered system also has overdraft prediction capabilities so we can send you an alert before you’re likely to overdraw your account. We keep a detailed list of the fees that you’ve been charged, which ones are negotiable, how cooperative your bank is, and much more, making your negotiation experience much easier.

We get it — negotiating can be time-consuming, stressful, and unsuccessful, which is why Cushion also offers an optional 💭 Fee Negotiation add-on. If you opt in, you’re enabling us to automatically negotiate your fees with high refund probability on your behalf. If — and only if — your negotiation is successful, we’ll collect a commission on your refund.

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $11 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.