Think banks can continue to bank on raking in fee revenue? Think again.
New statistics show that checking account holders may be slowly overcoming their unhealthy addictions to overdraft fees. According to Illinois-based economic research firm Moebs Services, overdraft revenues at banks and credit unions declined by nearly $1 billion in the first quarter of 2013 from the fourth quarter of 2012.
Michael Moebs, CEO of Moebs Services, believes that part of the decline may be due to checking account holders trying to hold down expenses.
However, the decline doesn't mean overdraft fees are entirely dead -- far from it, in fact. Banks and credits unions still collected a whopping $31.1 billion in overdraft fees throughout the first three months of the year. Moebs also highlights that historical data show that account holders are typically more cautious when it comes to their finances at the beginning of the year.
"February and March are historically the lowest months for overdraft transactions because the consumer is trying to recover from the holiday season, which can be hard on the wallet and purse," Moebs said.
Regardless of the time of year, it's important for all account holders to realize that overdraft fees are very easy to avoid simply by opting out of the protection. Sure, it may cause a slight bit of embarrassment in the checkout aisle, but it's better than seeing a glaring extra fee on an account statement.
What do you think of the decline in overdraft revenue at banks and credit unions? Are we finally beginning to say no to the infamous $35 cup of coffee? Or will banking customers continue to fork over extra cash for failing to monitor their money?