Study: Avg. Bounced Check, $40; Total Cost, $58

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LAKE BLUFF, Ill. – Half of consumers who overdraw their checking account do so by $40 or less, yet it costs them about $58 every time.

That’s the finding of the latest study from economic research firm Moebs $ervices, which found 34 million consumers, or about 26% of consumer checking accounts, overdraft 10 or more times per year.

The median overdraft charge among all banks and credit unions is $28 and merchants charge $30 on average for a bounced check, bringing the grand total to $58, according to the study that included 1,240 banks, 1,292 credit unions, and 832 national retail merchants such as Wal-Mart, Home Depot, Walgreens, Safeway and others. Approximately 20.5% of banks and credit unions do not provide overdraft service. The study also showed 40% of national retail merchants will not accept checks for purchase of goods or services, thus requiring cash, debit card or credit card.

Wall Street banks, defined as those with $50 billion or more in assets, charge $34 per bounced check. Community banks and credit unions charge $25. “Consumers, especially those who overdraw their checking account 10 or more times a year, will pay significantly less in fees if they bank with a community bank or credit union that offers overdraft services,” pointed out Michael Moebs, economist and CEO of Moebs $ervices.

The Moebs Study concluded that for consumers who end up with a negative balance of less than $100, the most cost-efficient provider of overdraft funds is an Internet or brick-and-mortar payday lender. “Payday lenders have a median charge of $17.50 for a small loan of $100 or less, which is sufficient to cover most consumers’ negative balance checking accounts, asserted Moebs, who noted that CUs can capture a great deal of overdraft revenue if they drop their price to below $20.


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