If you’re not rich, your bank probably wants you to overdraft

While I think overdraft fees are gross and exorbitant (and I fell at their mercy a few times before I finally wizened up and got overdraft protection), I don't really think this is that big of an issue (at least, compared to other issues in the banking system.) It's a pretty solvable problem from the consumer end -- don't spend money on a card if you're not sure you have at least X in your account.

Overdraft fees are absurd, but so is complaining about them. Just go to your bank and ask them to disable overdraft. If you don&#x27;t have the money and overdraft is disabled, the transaction will simply be declined. If you want to spend money you don&#x27;t have yet, you can do it the normal way, by borrowing.<p>(Also, flagging the article.)

The graph in the article suggests the bank&#x27;s cost for a checking account per year is $250. Wow. That seems like a huge opportunity to provide better banking service. Driving that cost down to $100 or so would be a very big deal.

<i>Fact 1: If you don’t keep several thousands of dollars in your checking account, overdrafting is near the only way your bank makes money on your account.</i><p>I thought the bank could make money by lending out a multiple of all the money deposited, such that if I deposit 1000 dollars, they can now lend out on the order of 30000 (i.e. thirty times) that. If they lend that out at, say, 10% interest, they can make 3000 a year because I have 1000 in my account.<p>The magic of fractional reserve banking. If I&#x27;ve misunderstood this, I&#x27;d very much like to be corrected, please.

Yes, and to add to that, credit card companies <i>do not</i> want you to pay your balance off in full every month, because even though they get a 2-3% cut of every credit transaction from the merchant, interest is still how they make most of their money. I have heard that within the credit card industry, they even colloquially refer to such responsible cardholders as &quot;deadbeats!&quot;