Banks and Credit Unions charge their customers over draft fees nationwide on average of $27.01 which is 33 percent more expensive that average payday loan fees that are on average $17.97 according to a press release by Moebs,

The average amount overdrawn on checking accounts by about 70 percent of consumers, according to the General Accounting Office and the FDIC, is less than $100,” said Michael Moebs, economist and CEO of Moebs $ervices. “Consumers who use a payday advance loan for $100 or less will pay an average of $17.97, which is 33 percent less than the $27.01 it costs for an overdraft of that same amount from a checking account,” he explained. “For consumers who struggle to meet their financial obligations, the savings between the two is significant

The study suggests banks to reduce their over draft fees, that is also known as NSF (Non Sufficient Funds) so less of their consumers are forced to take payday loans specially for those customers who are financially struggling. It would also help both banks and credit unions to make more money.

If banks and credit unions lowered their overdraft fees and reached out to consumers who are frequent users of payday loans, more consumers would opt to use the overdraft services of their financial institution. This would secure future brand loyalty, and be a good source of additional revenue

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