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Checking account customers are racking up hundreds of dollars in overdraft fees each year, a new government report finds.
On average, overdrawing an account costs customers $225 in fees per year, according to a new study from the Consumer Financial Protection Bureau.
Overdraft fees are sparked when a customer overdraws their checking account by making a purchase with their debit card and the bank covers the transaction instead of denying it, while non-sufficient fund fees kick in when a check or automatic payment overdraws the account.
Depending on the bank, the average amount spent on these fees can be as low as $147 per year and can go all the way up to $298. And banks aren't complaining, with overdraft and non-sufficient fund fees making up 60% or more of consumer checking account fee revenue, the CFPB estimated.
Source: CNN Money