Although it seems like every week banks are ratcheting up fees charged to customers with low account balances, the largest U.S. bank by assets is changing up the game.
Beginning July 22, JPMorgan Chase will no longer charge overdraft fees incurred by purchases that cost $5 or less, according to the bank's checking disclosure notice. The new policy will prevent customers from wracking up outsized fees for small purchases -- like a $34 overdraft fee for a $3 slice of pizza. [Hat tip: Bucks Blog]
Chase is not the only bank to let smaller charges fly under the overdraft fee radar. US Bank, which announced it was raising the price on fees for big-ticket items earlier this month, does not collect an overdraft fee for charges that are less than $10. SunTrust, which recently announced that it will also be upping a number of fees associated with its checking accounts, does not levy an overdraft fee on items that are less than $5.
Under Chase's current policy, overdrawn customers are charged $34 per overdraft, no matter the size of the purchase. Chase has a set maximum of three overdraft fees per day, or a total of $102.
Chase now stands out among the sea of banks that are increasing charges for everything from overdrafts to ATM withdrawals. Earlier this year, the bank lowered other fees, including the cost to transfer money from one account to another to cover a potential overdraft, and lowered the cost to stop a check payment.
On June 27, when Fifth Third increases its overdraft fees, the Cincinnati-based bank will win the award for most expensive single day overdraft fee. Customers will be charged $25 for the first overdraft of the year and $37 per subsequent transaction. Under the new policy, a customer could incur up to $370 in charges in one day.
Chase's game-changing move comes at the tail end of a few weeks of really bad PR for the financial institution. Jamie Dimon, JPMorgan Chase's CEO, has been in the limelight defending the bank's loss of anywhere from $3 billion to $8 billion from trading credit derivatives.
Earlier this year, JP Morgan Chase agreed to pay $110 million to settle a lawsuit alleging the bank charged customers excessive overdraft fees.
Check out the following list of bank fees compiled by 24/7 Wall Street:
Clarification: The story has been revised to clarify that Fifth Third will have the highest potential overdraft charge that can be incurred in one day.