$39 for going $1 over is not fair. Multiples of $39 for accidentally going over a few times in quick succession is not fair either.

Fair would be 100% of the amount over, up to $39. For example, if someone goes over by $1, then charge them $1. If it's $5, then charge them $5. If it's $39 or $100 or more, then charge them $39.

Banks should either do away with per transaction fees, which can be upwards of 1000% of the transaction amount, or they should improve their account holder notification systems in the case of overdraft or threat of overdraft, or they should treat overdrafts as short term credit and simply charge a mildly unpleasant interest rate.

Typical scenario: you accidentally buy a coffee, then a donut, then a newspaper, then lunch, then afternoon tea, all without realizing you are overdrafted on every transaction? You may only be over by $20, but you just got hit with $100 in fees. And then you get your paycheck the next day. What is the interest on a $20 debt for one day worth to a bank? Certainly less than $100.

Ok, everyone is capable of checking their own balance, but these fees would be more acceptable if more banks sent an email, SMS, or phone call when an account had an overdraft or a low balance. Better yet, they could analyze your income schedule (you get a direct deposit every second Friday, for example), and send an alert if your current spending is likely to produce an overdraft before your next deposit. In any case, you could budget your remaining money or take out a large ATM withdrawal for all the money you'll need, paying just one overdraft fee.

A better solution, though, is to treat overdrafts as short term credit. Your checking account would have a credit limit and an interest rate, just like a normal credit. The interest rate would be higher than a typical credit card, though, and the limits would be lower. When you have a negative balance, they would simply charge interest. Then it wouldn't matter how many transactions you make, just the amount of the negative balance and the time it takes you to restore a positive balance.

Now, I am not a banker, and I think there are probably issues regarding the liquidity of your positive-balance checking account versus a line of credit (which may be part of the reason for these ridiculous per-transaction overdraft fees in the first place), but just as a naive account holder it sounds like a good idea.

They don't want you to overdraft.
Therefore, they make the pain of doing it proportional to the infraction.

My bank will charge $40 for each overdraft, but they will refund the first two if you ask.

A good relationship with your personal banker will help a great deal. If you approach them immediately and work to resolve the issue with steps to prevent it from happening again, you'll be better off. Be PRO-active rather than reactive. It goes better.

There is really no "fair" price. Overdraft fees for banks is part of their bread and butter and without those stupidly high extortionist fees the banks would fail. And we have all learned that Republicans and Democrats alike will do anything to keep the bankers happy no matter what the price is.

So Chase and B of A charge whatever you want to!! Screw us all over for more money!! It's your patriotic duty to fuck over America!!!! Praise JESUS!!

I bank at Wells Fargo and my fee is 10 bucks if I go over my checkings limit- it simply takes the money out of my savings account and then applies a ten dollar deduction. Much better than the 35 I used to be charged at BoA back in the day. Of course, if there is not money in the savings then I am not sure how much they charge but I bet its a bit more than 10.

I think people would be less pissed about it if overdraft policies were more rational. For instance, if a single days charges come through and cause an overdraft, they should be charged to the account from smallest to largest so that overdrafts are limited.

It feels like it's simply another way for the banks to make money rather than what it should be -- a way to disincentivize the habit of overdrafting.

But to answer your question directly, $20 would feel fair.

$5. i'm serious. $5 is enough to say, "aw, dammit," but not crazy enough to be the equivalent of a utility bill. yeah, repeat offenders should get their shit together, but honestly, people make mistakes. SEVERAL TIMES OVER. this is an easy way for banks to make money and the way it can escalate is really scary. banking is pretty much essential, you can't avoid it in the real world--and sometimes no matter how organized you are, it's easy to make a mistake/lose track. cut people a break. if they're doing it 5 times a month, they need to get better at keeping tabs. if someone overdrafts 3 times a year...well...that's life. you know?

There is no fair price. Get an ING DIRECT Electric Orange checking account. No actual checks, but no overdraft fees either. Instead, there's an overdraft line of credit with a 9% APR. Instead of getting charged $35.00 for a $0.35 overdraft on a cup of coffee, you get charged a small amount of interest. It's far superior.

Hmm, well I prefer if fees are between 20-30. That's still enough to make me cringe, but slightly less gouging on my income. And fees were well within that range for most of my banking life. it's only recently that they've went up.

I don't "mind" paying the fee because it's my stupidity usually. I get mad at myself sometimes, because I'm a bookkeeper and I keep an anal eye on my own account balances. It's usually a receipt I lost for a place I rarely go to or something like that. It doesn't happen often, but I have had it happen where I've purchased something and then many small things afterward and I get charged for them all.

I hate that. I wish that once my account was overdrawn it would cease to work or decline my debit or credit card. That would be most helpful. Those are the only fees that I really feel are unfair.

I understand the difference between pending balances and real time balances and frankly, even if I have pending charges that put me over, even if my real time balance is not, I would prefer all new purchases stopped.

On the one hand, I think the "fair" price would be one that disincentivized overdrawing one's account to the extent that the privilege was only used as emergency credit. Which is what it should be.

On the other hand, Andy is right that this, like other credit products offered by banks, is basically a financial staple for these institutions. Whatever our opinion of people who routinely overdraw their checking accounts or rack up late fees on their credit cards, the banks basically rely upon them for a steady income.

So, basically, if the banks were looking to be fair rather than profitable, they would charge a lot more for these kinds of cash flow errors.

That said, it makes sense to me to have ~$20 or so that could be forgiven for customers in good standing who make up the difference within a certain time period.

Fair would be not allowing people to overdraft their accounts and then charging them for it.

Overdraft fees aren't designed to be fair in the sense that a customer's okay with it. Overdraft fees are designed to hurt, in order to deter you from overdrafting at all in the first place.

If people are flipping a lid over $40 for overdrafting, then a $40 fee is probably fine. The message gets across ("hey dude, you screwed up") and astute banking customers will avoid overdrafting again if they can help it.

I know this view may be unpopular (based on the other responses), but I don't see why anyone overdraws at all. Perhaps this is how I was raised, but I have never, ever overdrawn. I hate owing money and paying interest, so I always make sure I don't spend more money than I have. Is this really so difficult for so many people? I am asking this earnestly, without judgment.

Therefore...I don't think there is a "fair" or "unfair" fee for overdrawing. You're using credit that the bank hasn't extended to you, so you're going to incur a penalty. They aren't really trying to trap you into overdrawing in order to make money. You have access to your bank statement at virtually any time (from your computer, from your phone, from any ATM). If you can't pay all your bills and rent, and pay for food and other living expenses without overdrawing, perhaps it's time to get another credit card and another job.