I don't really understand overdraft charges. I don't mean that I can't grasp why they exist. I simply mean that I don't get how they make sense. To keep the business of their customers, it would make sense for banks to largely forgo overdraft charges. These charges also end up building up very quickly.
One ends up in an endless cascade of charges which they can do little to stop. Once you have an overdraft charge on the account you end up with a negative balance fee, which means that you are further in the hole. all of this not because of money you were spending, or money you owe to people, solely because you didn't have the money right away. Perhaps a bit of interest would make sense, think of overdrafting as a high interest loan if you will. Even with that model the charges are exorbitant.
The reason I bring this up is that I had tuition and rent come up in the same week. I had the money to pay for it, but just barely. Paying for food, and essentially nothing else put me a little over the edge and now I'm going to go and straighten everything out. The problem is that I have enough money to straighten my account if it were just the amount I'm negative and perhaps a bit of interest from a week of being negative, but with overdraft and negative balance fees as they are I won't have enough money to pay it off ever.
I really do think that is an accurate assesment of the situation. I live on slender means as it is, so I have to be careful about when money goes in and when it comes out. All of that is very very tight for me. Add fees and I can't do it.
The point is that the bank would get their money and even make profit if they simply treated it as a debt that gained interest, but by treating it this way they will never get their money.
I'm not worried about my personal situation, but there are people with more slender means than me, and they wouldn't likely be able to fix the situation. SO banks should fix this problem. That really is what it is, bad business, poor design, and an unfair practice. I'm not sure if the last point is one for convincing the banks, but the first two are valid and deserve looking at.