June 17, 2019
If you’re someone who is affiliated with the military, you may be familiar with a USAA checking account. While USAA advocates its support for military members and their families by waiving opening deposit fees and allowing the option to get paid early, the bank does not talk about how costly it can be if you are charged a USAA overdraft fee. USAA does offer an overdraft protection service, but there are rules. When these aren’t followed, it can still result in fees charged to your account.
How USAA overdraft fees work
For those of you who are not as familiar with overdraft fees, they occur when you don’t have enough money in your account to pay for a transaction, and your bank ends up covering it for you.
A USAA overdraft fee is now $29 (having just increased from $25 on June 8th, 2019). They apply to checks and other withdrawals from your account that USAA elects to pay. Overdraft charges can take place if you overdraft by $5 or more and charged per transaction. For example, if your account has a balance of $1 and you buy an $8 sandwich, you will be charged for that sandwich PLUS an overdraft fee. If you buy something else while your balance is negative, you will be charged another overdraft fee.
“USAA overdraft fees are now $29 each…and are charged per transaction.”
Overdraft fees are known for their potential to add up quickly. The CFPB found that accounts enabling overdrafts are three times more likely to have 10+ overdrafts per year, compared to accounts that do not allow overdrafts.
How USAA NSF Fees Work
USAA’s non-sufficient funds fees are also $29 each and apply to checks and other withdrawal from your account that USAA returns without paying due to insufficient funds. There’s a limit of 3 overdraft fees and 3 NSF fees that can be charged within a day at maximum. This means you could be charged up to $174 within a single day for not having enough funds in your account to cover your transactions !
In fact, this past February, a woman with a USAA bank account opened up a lawsuit against USAA. She claimed they violated their consumer protection statutes when charging her an NSF fee multiple times for a single transaction. Additionally, she states USAA’s deposit agreement does not say it will charge multiple NSF fees (for one charge) and actually claims it will not do this.
Understanding USAA’s overdraft protection service
The bank’s ‘USAA overdraft protection’ is a way to help customers combat overdraft fees. USAA Overdraft Protection allows money to be transferred from a USAA checking, savings or credit card account when you don’t have enough money to cover a check, scheduled bill payment or automatic withdrawal payment.
While there is no fee to enroll in USAA’a Overdraft Protection service, USAA “may charge you fees for excess transfers from a savings account or interest for cash-advance transfers from your credit card.” Additionally, if you use a savings account, there is a limit of six withdrawals and transfers per monthly payment cycle. If you accidentally pass this limit, it may result in additional fees. These $10 transfer fees can add up. If they occur more than three times within a 12-month period, your savings account may be converting into a checking account or closed all together.
How to get your overdraft fees waived
If you notice a USAA overdraft fee listed on your statement, you can try calling up a USAA representative. It’s important to be polite, but firm. If you have previously been in good standing or have banked with them for multiple years, let them know! Be sure to ask open-ended questions like, “How can you help me with these fees?” By asking open-ended questions, it may be more likely that the USAA representative will offer to refund your fees.