Consumers who overdraft their checking account five times or more per year account for 93.4% of the overdraft fees banks collect, according to the FDIC.
Why don't they learn their lesson? Some people actually do this on purpose.
Many repeat overdrafters don't want to go to payday lenders, and are using overdraft protection as a line of credit instead. While banks are usually happy to oblige and collect fees, at the same time, overdrafters are viewed as credit risks that could stick the bank with potential losses.
"Overdrafters are a bit like addicts, and the banks want to take advantage of that and target those customers," said CardHub.com CEO Odysseas Papadimitriou. "There's a risk in taking them on, but it's a high risk, high return kind of situation -- and overall it's profitable."
These 7 credit cards are the superheroes of the banking world, say industry experts, providing low fees and sane rates to people trying to build or repair their credit. More
|SpaceX to fly two space tourists around the moon in 2018|
|Sweden doesn't recognize 'national security adviser' interviewed on Fox News|
|Warren Buffett: $1 million a year for life to employee who guesses Sweet 16|
|Warren Buffett: Red-hot market not in a bubble, still looks 'cheap'|
|The Nokia 3310 phone is back|