Recently, USA Today printed an article about how banks, not payday loan companies, are causing financial woes for their consumers. Banks continue to be considered the “stable financial standard”, while payday loans are the “evil” alternative. However, how much goes overlooked when it comes to bank fees and overdrafts?

The article cited two specific consumer experiences.  First, a 43 year old divorced mother of two was slapped with a $175 overdraft fees for small-dollar debit card purchases.  Small, as in coffee and lunch.  Similarly, a 33 year old had overdraft fees adding up to $400 within a few months.  She apparently kept very good tabs through her online account, but was still surprised with overdraft fees.  She stated that the fees "affected her (abilitiy to pay) groceries, gas money, everything you need to live on."

In a survey conducted by USA Today, it was found that, of the largest retail banks, none of them provide warnings for point of sale overdrafts to their consumers.  So, essentially, in the most crucial time for a consumer to know what fees will be incurred, there is no information given.  Individuals are unknowingly hit with relatively large fees.  

One of the beautiful things about payday loans is that the consumer knows beforehand exactly what fees will be added.  A lot of payday loan critics state that the short-term loans "target" unexpecting and incapable borrowers.  It seems that, at the very least, the payday loan industry provides the information necessary for it's borrowers to make informed decisions and knowledge concerning what exactly they will be paying.