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Bank customers who overdraw their accounts pay an average of $225 per year in fees, according to a recent government report. The Consumer Financial Protection Bureau has released findings from an inquiry into overdraft protection programs, which allow transactions to be approved even when there isn't enough money in a consumer's checking account to cover them. It's rare to find a bank with no overdraft fees, but consumers can take a simple measure to avoid these charges: Don't opt in.

In 2010 the Federal Reserve started requiring banks to let consumers decide whether or not they wanted to opt in to overdraft protection. "Protection" is a bit of a misnomer; in reality consumers are opting in to "overdraft allowance." They're giving the bank the go-ahead to approve a debit-card purchase, for instance, even when there aren't sufficient funds available and transfer money from a savings account or credit card to cover the difference. Banks then charge fees ranging from $10 to $45 per transfer; the median among the largest institutions is $34. The bureau's report shows that customers who relied heavily on overdrafts in the first half of 2010 (more than 10 occurrences) and then declined to opt in saved an average of more than $450 in the second half of the year.

There is one benefit of opting in: The fees for transferring funds to cover an overdraft are often lower than the fees for insufficient funds that are charged when a check bounces. At Bank of America and Chase, for example, the fee for a transfer is $10, while customers who don't have overdraft protection pay more than $30. But the financial downside of allowing these transfers -- and transfer fees -- often outweighs the benefit.

A first step consumers can take to avoid overdraft fees is to sign up to receive automatic texts or emails when an account balance falls below a set amount. Knowing how much is in an account is the best way to avoid overdrawing it. Once this is set up, opt out of overdraft protection. Everyday debit-card transactions will be declined if there isn't enough money in your account, which can be embarrassing, but it beats potentially paying an extra $34 for a $4 purchase. The opt-in requirement doesn't apply to recurring payments such as a gym membership or automatic bill pay, only to ATM withdrawals and debit-card transactions.

For consumers who never want to hear, "Your card has been declined," and think they may overdraw an account occasionally, there is one option that stands out for its novel approach: the CapitalOne 360 Checking account (formerly ING Direct). Instead of charging a hefty fee for overdrafts, the account offers users a line of credit. This means that beyond what's in the account, there is a sum of money, based on the account holder's credit worthiness, available as a backup measure. The interest rate on the loan is variable but has remained steady at 11.25% APR for the past two years. The result is that an overdraft of $50 costs an extra 47 cents per month in interest, instead of a far higher flat fee. Account holders can also benefit from paying based on the amount loaned, as opposed to per transaction. If a customer makes five $10 purchases while in overdraft, a $34 fee would climb to $170. With the overdraft line of credit, the additional cost remains the same as it would for one $50 purchase -- 47 cents. Although customers who borrow more than $100 need to make a minimum payment of $100 the following month, the extra fee for using even the maximum $1,000 credit line is only $9.38 per month.

If it's too late and you've recently been charged an overdraft fee, try to get it waived. Call the bank and politely explain your situation to a representative. There's no guarantee of success, but banks do waive fees to keep customers happy.

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