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NEWS RELEASE
June 18, 2008
ABA Media Contact: Carol Kaplan       
(202) 663-5471
E-mail: ckaplan@aba.com

NINETY-ONE PERCENT OF SENIORS HAVE NOT PAID OVERDRAFT FEES

WASHINGTON – A vast majority of Americans aged 55 and over – 91 percent – have not paid overdraft fees in the last year, according to a survey conducted by Ipsos-Reid for the American Bankers Association.    

One question asked, "Have you paid an overdraft fee in the past 12 months?"   Overall, 80 percent of consumers answered "no."  That figure rose steadily with age, with consumers 55 and over being the most skilled at managing their finances to avoid overdraft fees.  (See "Tips.")

In addition, of the 9 percent of seniors who say they did pay an overdraft fee during the previous year, 90 percent said they "were glad that the payment was covered" by the bank.

The annual survey of 1,000 consumers was conducted on July 24-26, 2007.   ABA is re-releasing the findings in response to assertions by the Center for Responsible Lending that overdraft fees are harming large numbers of senior citizens.

However, overdraft fees are avoidable.  ABA offers specific tips for all consumers to avoid overdraft fees:

Eight Tips to Avoid Overdraft Fees

1. Use direct deposit for your paycheck.  You will have access to your paycheck immediately.
   
   
2. Keep track of your balance and transactions and don't forget about automatic payments.  Today, it is easier than ever to check balances and transactions online, by phone, or at the ATM, 24 hours a day.  Some banks even offer mobile banking so you can check your balance on your cell phone.  However, keep in mind that those balances will not reflect transactions you authorized that have not yet reached and been processed by your bank.
   
   
3. Keep a "pad" or cushion of money in your checking account just to be safe. 
   
   
4. Link your checking account to an overdraft line of credit, savings account, or credit card.  These are usually less expensive alternatives, but remember that for overdraft lines of credit and credit cards, you have to pay it back. The amounts are usually not automatically repaid from new deposits into your checking account.
   
   
5. Find out if your bank will allow you to "opt-out" of overdraft protection.  However, ABA surveys show that most consumers prefer having the security of knowing their transactions will be covered even if there is a fee.
   
   
6. Ask your bank for a small line of credit that will cover you if you overdraw your account.  Just be sure to pay it back as soon as you get the bill.
   
   
7. See if your bank offers automatic notification when your balance drops below a certain level.  You may be able to get notified by text message or email.
   
   
8. Change banks if your bank doesn't offer the services you would like, or charges too much for overdrafts.  There are literally thousands of banks competing for your business.

The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation's banking industry and strengthen America's economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry's $13.3 trillion in assets and employ over 2 million men and women.

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