Overdrafts more expensive than online fast cash payday loans
Banks can charge up to $65.00 to reverse a transaction due to non-sufficient funds in the Bank account. For this reason, Fast-cash, online payday loans with bad credit are more popular than ever. The legislation surrounding the short-term payday lenders have changed dramatically over the past few years and the fees have dropped as much as 40%. This means that this product is no longer an expensive option for customers and it could mean saving hundreds of dollars per year in overdraft and non-sufficient fund fees.
Banks are charging fees for unarranged overdrafts that are as much as seven times higher than those for payday loans, according to a report calling on the City regulator to act over “rip-off charges”. It’s alarming that most banks are still allowed to charge such high overdraft fees. These extortionate fees can cost thousands of dollars a year, hitting those who can afford it the least.
The regulator has said that it is looking at “fundamental reform” of overdraft charges and will launch a consultation later in the year on a wider package of measures to deal with problems. These can include persistent debt among people who maintain an overdraft from month to month, racking up fees. It is important to note that overdrafts were the second most common type of debt and this issue does not even include non-sufficient funds fees which are a “useless fee” charged by Bank as they do not run any risks on the transaction.