Paying their bank cards on time doesn't seem to be a problem for
most Americans. According to the American Bankers Association,
delinquencies in the fourth quarter of 2012 fell to an 18-year low.
But the total fees collected from checking account overdrafts are
another story, as they rose 1.3 percent in 2012, according to a new
report. Moebs, the economic research firm that tracked this data,
says the increase comes after three years of declining fees.
Taken together, the two stats suggest a picture of Americans
committing to getting a handle on debt, but who may be stretching
their checking accounts thin as a result.
Bank card delinquencies hit 18-year low
First the good news:
The American Bankers Association reports
bank card delinquencies fell 28 basis points in the fourth quarter
of 2012. That means only 2.47 percent of all bank card accounts
were delinquent during the quarter, a number that is well below the
15-year average of 3.87 percent. It is the lowest delinquency rate
since the third quarter of 1994.
The ABA says the decline in bank card delinquencies is likely
part of a consumer response to economic uncertainty.
"Consumers continue to carefully manage their finances in an
effort to get debt levels under control and build up a secure
financial base," said James Chessen, ABA's chief economist, in a
Overdrafts climb to $32 billion in 2012
Perhaps consumers are trying to get a handle on their credit
card debt, but some are apparently having difficulty maintaining
enough in their checking accounts to avoid overdraft fees.
that bank and credit union customers racked up $32 billion in
overdraft fees in 2012.
While that amount is below the 2009 level of $37.1 billion, it
is an increase from 2011, when consumers paid $31.6 billion in
overdraft fees. The 2012 increase in fees comes despite
increased government regulations
, such as requiring consumers to opt-in to overdraft programs.
"Having truly captured the massive alterations that have gone on
in overdrafts in the past several years, it's clear that overdrafts
are going to be with us for a long, long time," said Michael Moebs,
author of the study, in a press release.
However, there is a considerable difference in overdraft fees
between institutions. The Moebs study found median fees varied by
- Bank: $30
- Credit union: $27
- Payday lender: $16
In addition, larger banks and credit unions tend to have higher
fees. For example, banks with more than $25 billion in assets had
median overdraft fees of $35. Those with assets of less than $100
million had median fees of $25.
Striking a financial balance
It appears consumers are trying hard to
get their finances in order
. While the low bank card delinquency rate is good news, rising
overdraft fees may signal that financial pressure in building
elsewhere for consumers.
To keep their financial house in order, bank customers can opt
to build a healthy savings account for covering emergencies, and
shop around for an institution that offers the best bank rates and
the lowest overdraft fees. Doing so may help avoid some of the
situations that lead to credit card delinquencies and checking
overdrafts in the first place.