The Wall Street Journal reported today that consumers are not happy with overdraft fees, the alternative banks offer to payday loans. The average bank fee for overdrafting is $27 per transaction. Banks make an estimated 25% - 30% of their revenues from overdraft fees.

So who can blame consumers for their outrage? Imagine, having $10.00 in your account and going out and spending $5.00. You think you are fine, except that a transaction just cleared that you forgot about a minute before, leaving you with only $4.00 in your account.

When you make the $5.00 purchase, it goes through fine and you think everything is ok. Thinking you still have $5.00 since the first transaction cleared just fine, you go to several stores and make little $1.00 purchases. Each continues to go through just fine.

Little did you know that the first transaction incurred an overdraft fee of $30. Then all four one dollar purchases afterwards incurred their own $30 overdraft fees. That puts you at $150 in overdraft fees for spending a mere $5 more than was in your account.

The problem is that rather than deny the authorization when there are not enough funds, the bank just approves them and charges a fee for overdrafting. No notification takes place at all. This has consumers in an outrage.

With the revamping of our financial industry, consumers are taking the opportunity to vent to the Federal Reserve, begging them to fix the situation. The only problem is that banks would have to make up the lost revenue somewhere, likely causing free checking accounts to come with a monthly fee.

The irony in all of this is that consumer advocates pushing to ban payday loans are the same ones who pushed to deregulate banks and the financial sector. Spending $5 than you have can theoretically cost you $150 in overdraft fees. Just borrow $10 for a week from a payday lender and you would pay about $1 in fees.

Which option is the most cost effective for you to cover that little purchase or two? Should be a no brainer. Payday loans sure beat overdraft fees when it comes to short term financial needs.