Bank of America Has Eliminated Overdraft Fees and the Penalty for Bounced Checks | Latest Update!
Bank of America has made a number of customers happy by announcing that it will no longer charge fees for overdrafts and failed cheques. Overdraft costs were normally between $10 and $35, but starting in May 2022, they will be eliminated. According to NBC News, this action was taken because many customers were overspending on their accounts and plans.
What was BOA’s strategy?
The decision by one of the country’s largest banks to eliminate the overdraft fees that they had previously charged customers. These costs, which were collected from all overdraft fees and failed checks, amounted to hundreds of dollars each year, especially for frequent overdrafts and other types of transactions.
The Bank, which is based in Charlotte, North Carolina, has altered other client practises, such as the charge of non-sufficient funds, which is commonly imposed on a customer’s account when it rejects a transaction, also known as bouncing checks. When a purchase on a debit card exceeds the available cash credit, an overdraft fee is incurred. Boston25 News has been added to the mix.
The Consequences of the Change
Since checks are practically obsolete, bills and other internet payments, particularly utility bills, are automated, resulting in NSF fines. The second-largest bank, Bank of America, has stated that the NSF or overdraft fee accounts for 25% of the institution’s revenue.
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According to USA Today, a reduction in the collection of overdraft fees and rejected checks could result in lower earnings over time. However, a Bank spokeswoman expressed confidence that the alternative financial options available to their customers will eventually eliminate the need for overdraft fees.
Customers and lawmakers have applauded the proposal, as it would be a bold step to become the largest consumer banking franchise. Now it’s a case of waiting and seeing if other institutions would follow suit.