Skip to footer

Overdraft fees? Chase says not under $5.

Chase bank will eliminate overdraft fees on purchases costing less than $5 starting July 22. Say goodbye to that $40 cup of coffee.

|
Frank Franklin/AP
In this May 2012, file photo, automobiles pass a JP Morgan Chase building in New York. Starting at the end of July, Chase will eliminate overdraft fees on purchases less than $5.
  • By Simon Zhen Mybanktracker.com

The term “$35 cup of coffee” will no longer apply to Chase’s customers — unless that cup of joe costs more than $5. Due to an upcoming change to the bank’s fee policy, customers will not pay overdraft fees for small transactions that empty their accounts.

Starting July 22, Chase customers will not be charged an overdraft fee of $34 if the transaction is $5 or less, even if the account balance is negative.

Additionally, Chase will not charge the $10 overdraft protection transfer fee on transactions that are $5 or less.

Of the 10 largest U.S. banks, Chase and SunTrust waive overdraft fees for small transactions.

However, customers shouldn’t assume that the changes will open doors to free coffee. Banks reserve the right to freeze or close accounts that repeatedly enter the negative-balance territory.

Overdrafts return to the spotlight

Last month, a proposed bill aimed to regulate the costs and frequency of overdrafts — building on the 2010 financial regulations that required customer consent to overdraw an account. Without consent, bank customers had their transactions denied and banks could not charge overdraft fees.

The new bill calls for fair overdraft fee pricing, overdraft-occurrence limits of one per month and six per year and the stop to the manipulation of transaction-posting order to maximize fees.

But, this bill was not responsible for the upcoming changes to Chase’s overdraft fee policy.

Rather, the changes stemmed from the filing of Chase’s $110 million settlement of a class-action lawsuit regarding overdrafts, cited a Chase spokesperson.

Filed in 2009, the lawsuit against 38 banks, including Chase, alleged that those banks manipulated the transaction posting order to increase the potential of overdraft fees. The settlement received preliminary approval last week.

In March 2010, Chase began posting transactions in chronological order, reduced the daily maximum overdraft limit from six to three and stopped charging overdraft fees when a customer’s accounts was overdrawn by $5 or less by the end of the day.

This March, Chase also lowered the fees for overdraft protection transfers and stop payment orders.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Overdraft fees? Chase says not under $5.
Read this article in
https://www.csmonitor.com/Business/Saving-Money/2012/0713/Overdraft-fees-Chase-says-not-under-5
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe