News Number of the Day Frequent Overdrafters Live on the Financial Edge Number of the Day: The most relevant or interesting figure in personal finance By Diccon Hyatt Diccon Hyatt Diccon Hyatt has written hundreds of articles about how public policy and the economy intersect with personal finance, tracking all the latest dynamics affecting your money. Before joining The Balance, he covered business and community news for 17 years, including Princeton, New Jersey's high-tech Route 1 Corridor. learn about our editorial policies Published on June 2, 2021 Fact checked by Helen Reis Fact checked by Helen Reis Helen is the senior news editor for The Balance and a veteran journalist with more than 17 years of experience, mostly in business and finance news. She is passionate about making complicated topics easy for everyone to understand and compulsive about accuracy and transparency. learn about our editorial policies That’s how little credit is available to people who frequently overdraw their bank accounts—a stark reminder of the slim financial margins that often lead to the overdraft fees a prominent online bank has now permanently removed. People who very frequently overdraw often don’t even have credit cards, but if they do, the available credit on them is just a tiny fraction of the $14,100 available to those who never overdraft, according to a 2017 study by the Consumer Financial Protection Bureau. These very frequent overdrafters—defined as those who incur more than 20 bank penalties a year for attempting transactions without enough money to cover them—also tend to have lower credit scores and lower bank balances. They make up just 5% of bank customers but pay 63% of all overdraft and insufficient fund penalties, the study showed. Advocates for people living paycheck to paycheck scored a win Wednesday when Ally Bank said it would eliminate its fee of $25 per overdraft. "Nationwide, more than 80% of overdraft fees are paid by consumers living paycheck to paycheck or with consistently low balances—precisely the people who need help stabilizing their finances,” Ally Financial CEO Jeffrey Brown said in a statement. “Eliminating these fees helps keep people from falling further behind and feeling penalized as they catch up." Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Consumer Financial Protection Bureau. "Data Point: Frequent Overdrafters." Ally. "Ally Bank Eliminates All Overdraft Fees, Ending Centuries-Old Industry Practice and Lifting Consumer Burden."