The days of a $35 cup of coffee may be numbered.
Overdraft fees, long one of the most hated charges in American banking, are shrinking fast — and in some cases, banks are being forced to hand money back to customers they overcharged.
Wells Fargo recently agreed to pay $22.5 million to settle claims that it hit customers with surprise overdraft fees on debit card purchases and ATM withdrawals.
The bank didn't admit wrongdoing, but the payout covers people who were charged fees on transactions when their account actually had enough money.
That's the kind of detail worth checking on your own statements.
The average overdraft fee has been stuck around $35 for years.
Now several major banks have dropped it to $10 or even $5, and some have scrapped it entirely.
Bank of America cut its fee from $35 to $10.
Capital One and Citibank stopped charging overdraft fees altogether.
Others now offer a small buffer — often $50 or more — before any fee kicks in.
Pressure from regulators, lawsuits, and plain old competition.
The Consumer Financial Protection Bureau pushed a rule that would treat overdraft lending more like a loan, forcing banks to disclose interest costs.
Even though that rule has been tied up in court, banks started moving on their own.
When one big bank drops a fee, customers notice — and the others follow.
If you haven't looked at your bank's fee schedule in a while, do it this week.
Ask three questions: What's the overdraft fee, how big is the buffer before it applies, and can I opt out of overdraft coverage completely?
If you opt out, a debit card purchase that would overdraw your account simply gets declined — no fee, no surprise.
Many people never realize this is an option.
Also worth doing: turn on low-balance alerts in your banking app.
A text at $100 left beats a $34 charge at $0 left.
And if you've been hit with multiple overdraft fees in the past year, call your bank and ask for a refund.
It works more often than people think, especially for a first request.
Some banks now offer short-term loans of a few hundred dollars for a flat fee, usually around $5.
Compared with three $35 overdraft charges in one week, that math isn't close.
Smaller banks and credit unions still lean on overdraft revenue, and some have quietly raised other fees to make up the difference.
Read the fine print before you switch accounts.
Our take: this is one of the rare cases where consumers win simply by paying attention.
Banks changed because people complained, switched, and asked for refunds.
Final Thoughts
Keep doing that, and check your last few statements for fees you may be able to claw back — the deadline on some settlements comes faster than you'd expect.