Overdraft and Nonsufficient Fund Fees: Insights from the Making Ends Meet Survey and Consumer Credit Panel
This report provides new insights about consumers’ experiences with overdraft and NSF fees, including the credit characteristics of consumers with varying levels of overdraft/NSF activity. We pair the CFPB’s 2023 Making Ends Meet survey with credit bureau data to paint a broad picture of the financial circumstances of consumers who incur overdraft and NSF fees. We find that roughly a quarter of consumers (26.5 percent) reside in a household charged either an overdraft fee or an NSF fee in the prior year. Our analyses also show a varied picture of consumers’ experiences with overdraft and NSF fees. On the one hand, some consumers appear to use overdraft credit often and intentionally, despite its high cost as a source of credit. On the other hand, a sizeable group of consumers overdraft infrequently and report being surprised by their most recent overdraft. We also find that consumers’ experiences with overdraft and NSF fees generally align with their credit and debt profiles. Consumers in the frequent overdraft/NSF fee group (i.e., having both overdraft and NSF fees, or having at least four of one fee type) have lower average credit scores, are the most likely to have a subprime credit score, no available credit on a credit card, and delinquent debt, while consumers in the no overdraft/NSF fee group have healthier credit and debt profiles. These analyses also suggest a high level of financial vulnerability—both paying bills today and weathering unexpected future shocks—among many consumers incurring overdraft or NSF fees.