WASHINGTON–The Pew Charitable Trusts has released a new “chartbook” that examines people who frequently overdraft their checking accounts. Titled “Heavy Overdrafters: A Financial Profile,” the release seeks to use graphics and narrative text to show the results of a survey of consumers who incurred more than $100 in overdraft fees over a one-year period (“heavy overdrafters”).
For background, Pew noted the typical overdraft fee at most U.S. banks is $35 for a median transaction of $24, which translates into an interest rate of 17,000% according to the Consumer Financial Protection Bureau. The chartbook explores the demographics of heavy overdrafters by age/generation, income level, race, and whether they are renters or homeowners and employed or unemployed, according to Pew.
Notably, the survey found African-Americans are overrepresented among heavy overdrafters, comprising 12% of the U.S. population but 19% over heavy overdrafters.
Additional key findings include:
- Fees consumed nearly a full week’s worth of heavy overdrafters’ household incomes on average during the past year.
- Most heavy overdrafters are Millennials and Generation Xers.
- Heavy overdrafters generally have below-average incomes relative to the U.S. population.
- More than half of heavy overdrafters are renters rather than homeowners.
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