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In February, Citi (a Credit-Land.com advertising partner) announced its plans to eliminate overdraft fees by this summer. The bank believes that this move will allow more consumers to access even more affordable financial services.
Citi plans to stop charging its overdraft, returned item, and overdraft protection fees completely. The new overdraft policy should go into effect during this summer and will apply to all consumer deposit account holders. This will make Citi the only top five U.S. bank to completely eliminate these overdraft fees.
An overdraft fee is a penalty fee your bank charges you when you spend more money than you have available in your account. Citi currently charges customers $34 when they overdraw their accounts. The bank has been trying to minimize overdraft fees for its consumers for twenty years. This announcement shows how Citi continues its attempts to make their banking products and services available to more consumers, including to underbanked and unbanked populations.
"We are continuously looking for ways to utilize our industry-leading capabilities to make the financial system easier and more equitable for communities who have little or no financial buffer," said Gonzalo Luchetti, CEO of US Personal Banking at Citi in the company's press release.
Citi is not the only bank that has plans to eliminate overdraft fees. Capital One announced its intentions to abolish all overdraft and non-sufficient fund fees for its consumer banking customers in 2022 (no exact date has been announced yet). PNC rolled out Low Cash Mode℠ to allow customers to avoid overdraft fees through account transparency and control to manage through low-cash moments or mistimed payments.
Ally Bank decided to permanently eliminate all overdraft fees after waiving them temporarily amid the coronavirus pandemic. Wells Fargo and Bank of America said they would eliminate their non-sufficient funds fees as well. Plus, Bank of America would lower its overdraft fee to $10 from $35.
JP Morgan Chase eliminated its non-sufficient funds fee and increased its overdraft limit from $5 to $50.