Chase Announces More Features to Help Customers Avoid Overdraft Fees
Today Chase announced some updates they’re making to their consumer checking accounts that could have a positive impact. Earlier this year, the bank adjusted their overdraft policy, only charging a fee if a customer was overdrawn by more than $50 at the end of a business day. Additionally, Chase also eliminated its returned item fee. Now, the company has announced further changes that they say will help more than 2 million customers avoid incurring overdraft fees.
First, the bank will now grant customers a grace period before an overdraft fee is assessed. Accountholders will have until the end of the following business day to bring their balance up to at least -$50 ($50 overdrawn) in order to avoid a fee. Additionally, Chase notes that custmers that use direct-deposit for their payroll checks will now be able to access their funds up to two business days early.
Chase’s moves to ease overdraft fees comes as the practice has gained continued scrutiny. As CNBC reports, the Consumer Financial Protection Bureau recently announced that it will be cracking down on banks charging such fees. According to the Bureau, banks earned more than $15 billion from overdraft fees alone in 2019.
Meanwhile, digital banks and FinTechs have also provided competition for brick-and-mortar banks, with the main draw being the lack of fees that many of these services charge. In June of this year, Ally discountinued the overdraft fees, with Capital One making a similar move this week. Elsewhere, challenger banks such as Chime and many others already allow customers to access direct deposit funds early and several others offer features that grant consumers some flexibility when it comes to overdrafts and advances.
In a statement regarding Chase’s updated policies, the company’s CEO of consumer banking Jennifer Roberts said, “We work to make our products better for customers every day. These changes have already provided the extra support to more than two million customers who have avoided on average $60 in fees waiting for their paycheck to hit or are just a little short in funds that day.” Roberts added, “We know that customers incur late fees on important bills. With overdraft, we help our customers avoid late fees and potential negative impacts to their credit score, and with debit card coverage customers can continue making purchases with their debit card.”
Overall, while these may be small changes and still find Chase lagging behind some other banking options, they still mark a positive step forward for consumers. Although it will likely be some time before we see overdraft fees completely eliminated and replaced with a better option, it looks as though pressures put upon these major banks are moving them forward. Hopefully this momentum will continue, resulting is positive finanical changes for many Americans.