Hefty ‘Debt Relief’ Fees Await Credit Card Over-Users

The beginning of a new year marks the arrival of the first post-holiday credit card statements and the realization for many that they may need to turn to debt relief companies for help. But consumers groups are warning credit card users that so-called debt consolidation plans could leave you with more debt – in the form of fees that can run as high as $4,000 for total debt of about $20,000 in the first half of a debt settlement agreement. In many debt settlement plans, consumers make monthly payments, usually into a special bank account, until “there is enough to make a lump-sum settlement offer to their creditors,” according to ConsumersUnion.org, the prominent non-profit organization which publishes Consumer Reports. The debt settlement companies, however, immediately start taking their fees out of this account.

Fed Prohibits Some ‘Costly’ Overdraft Fees on Debit Cards

In new Fed rules announced today, financial institutions are prohibited from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.

Banks Make Moves to Ease Debit Card Overdraft Fees

Under attack for excessive overdraft fees from consumers, legislators and even disgruntled customers on YouTube, three of the largest U.S. banks have changed their debit card rules by lowering or eliminating fees and giving customers more options.