Wallet Watch

Do you make simple math errors? The next time you do, you may pay $29 for it.

And if you commit the egregious crime of not knowing how much money is in your bank account, you pay pay upwards of $116.

A recent surveys of “courtesy” overdraft protection found that fees for one overdraft cost an average of $29 at our nation’s largest banks. So the next time you accidentally try to withdraw money from an ATM that overdraws the money in your account, be prepared to pay the consequences. In fact, many banks will allow you to use your debit card for purchases or an an ATM, and won’t tell you when you’re about to overdraw your account and incur a fee.

But what’s particularly egregious is that banks will charge you for each transaction you make when the account is in the red. For example, let’s say you set out Saturday afternoon to run some errands and you don’t realize you have only $30 in your bank account. You use your debit card to pay for $40 in groceries. That’s a $29 fee. Then you buy a $10 lunch on the same debit card. There’s another $29 fee. What if you need to fill up your gas tank for $40? And God forbid you get thirsty and buy a soda for $1.50? There’s two more fees of $29. In this scenario, the bank punishes you with $116 in fees because of your horrendous mistake.

Let’s say on Monday you check your bank account at work and realize your error and transfer money from your savings account to your checking account to bring it back in the black. So, essentially the bank extended you a loan for the roughly 48 hours that you had no money in your savings account. The problem is, in this scenario you borrowed $91.50 and paid $116 in fees.

Sound a little ridiculous? In banks’ own defense, many of them are known for reversing fees in these scenarios when customers complain loud enough.  But I think most Americans would agree that we’d prefer bank accounts that allow us to build assets and get ahead, and don’t particularly care to put up with navigating a labyrinth of fees just to keep our own hard-earned money in a safe place.