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Contrary to what you might think, banks love overdrafts. They’re happy to cover you then charge a hefty fee. This year banks will rake in close to $40 billion through overdraft fees. To put that in context, it’s about double what they’ll make off credit card penalties. If it weren’t for overdraft fees, nearly half of all banks and credit unions wouldn’t have made any money last year.

USA Today reports:

Large banks also reserve the right to process large transactions first, triggering more overdraft fees by emptying the account more quickly. Some even charge consumers before they overdraw by deducting a purchase when it's made, rather than when it clears, pushing the account into the red sooner.

There is a simple way for consumers to avoid all this—balance your freakin checkbook!

Posted by edelfenbein at July 10, 2009 11:05 AM