NEW YORK (AP) — The math is alarming for anyone with a debit card.
At Bank of America, overdrawing your account by as little as $6 could trigger a $35 penalty. If you don't realize you have a negative balance and continue spending, you could incur that fee as many as 10 times in a single day, for a total of $350.
Failing to repay the overdraft within a few days now results in an additional $35 penalty.
When the damage is done, you've racked up fees approaching $400 in less than a week, for overdrawing your account by as little as $60.
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It's a worst case scenario, but not entirely far fetched.
While debit cards aren't the only way to incur overdraft fees on checking accounts, they present a particular liability since most people assume they can't spend more than the balance of their checking account, said Kathleen Day, a spokeswoman for the Center for Responsible Lending, an advocacy group based in Durham, N.C.
That was the case just a few years ago, when most banks rejected debit card transactions if there wasn't enough money in the account, said Jean Fox, director of financial services at the Consumer Federation of America.
"If you didn't have enough money, the bank wouldn't accept it and you wouldn't owe anyone a fee," Fox said.
Now automatic enrollment in overdraft programs, which allow consumers to draw more than what's in their accounts, is an industry standard.
Consumer advocates, who have long criticized the practice, note that some banks are even raising overdraft fees.
In February, Bank of America changed its policy to charge $35 for the first overdraft in a 12-month period, up from the previous $25. It also raised to 10 the number of times a day an overdraft fee could be charged, up from the previous five.
Then last month, the North Carolina-based bank instituted a second $35 fee for overdrafts that weren't paid off within five days.
"I always thought the whole purpose of a debit card was that if you had $10 and tried to charge $11, they would deny you. That wasn't the case. It completely defies logic," said Peter Mojica, a 46-year-old software consultant whose son was recently charged fees totaling more than $100 after overdrawing his account by just $2.
PNC Financial, meanwhile, recently raised its fees on overdrafts that weren't paid off from $6 a day to $7 a day for a maximum of $35 over five days. Initial overdraft fees range from $31 to $36, depending on how many times an account was overdrawn in a one-year period.
