Worried About Overdraft Fees? We Got You Covered

An unexpected overdraft fee can really hurt. Especially when the next paycheck is days away, and people are charged a fee multiple times and often don't realize until it’s too late.

Many of us at Earnin have been there and understand how hard that can be. To help our community outsmart overdrafts, Earnin is proud to introduce Balance Shield Alerts.

By turning on Balance Shield Alerts, members will be informed via push notification when their bank balance falls below an amount they can specify, ranging from $0-$400. If their bank balance falls below $100, they can also enable Balance Shield Cashouts, which will preemptively cash out up to $100 of their earnings.

We're excited to help people avoid overdraft fees with our latest service.

Like the rest of our app, Balance Shield Alerts is free to our community.

The reality is that everyone struggles with their finances at some point in their life — it could be your next door neighbor, your boss, your pastor or even the person writing this. It could be anyone who needs their pay and is out of options.

And that's exactly why we do not charge a fee to use Balance Shield Alerts.

One in five Americans pay at least one overdraft fee every year, according to research firm The Pew, and it’s usually lower-income and younger consumers who are hit the hardest by these penalties.

“Financial institutions typically charge an overdraft fee when a customer’s account lacks sufficient funds to cover a transaction, but the institution chooses to pay the transaction anyway. Overdraft fees are triggered by debit card point-of-sale (POS) transactions, ATM withdrawals, electronic bill payments, and paper checks,” the Center for Responsible Lending (CRL) explains on its website. “The bank typically charges a fee, averaging $35, for each individual overdraft transaction it pays. What's worse, these fees can quickly accumulate, resulting in hundreds of dollars in fees per year.”

An Earnin community member from Austin, Texas explained what it’s like to be hit with an unfair bank fee. He recalls an incident where an autopay for a $19 utility bill caused him to fork out an additional $38 in fees — money he did not have to begin with. Since then, he’s switched to different banks, but none have been any better. And now he’s reached the point where he’d rather not have a checking account at all.

Stories like this are common and reveal the absurdity of overdraft fees and the massive financial implications they have for people.

The numbers are staggering, too. Every year, banks rake in billions in overdraft fees. In 2018 alone, consumers paid a whopping $34.3 billion in overdraft fees  — the most they’ve paid since 2009, during the end of the Great Recession, according to a new report from research firm Moebs Services.

If you’re interested in signing up for Balance Shield Alerts, download the Earnin App.

In 2000, the median overdraft was $18. In 2017, it was up to $30.1 in 10 millennials pays nearly $400 in overdraft fees yearly, according to data from a Consumer Financial Protection Bureau report.