Consumers feel pinch of bank fees

Data from the federal government estimates that U.S. banks will collect more than $38 billion in fees this year from consumers who overdraw their checking accounts, according to The Center for Economic and Entrepreneurial Literacy (CEEL).

Banks will collect billions more from other account penalties, including credit card late fees.

Moebs Services, which collected the information, reports that the average overdraft fee has risen to $27.50 this year, up from $25 last year. A 2008 study from the Federal Deposit Insurance Corp. found that insufficient funds and overdraft fees account for 74 percent of consumer bank service charges.

A 2008 study from Bankrate.com showed an increase of 2.5 percent in bounced check fees from the year before, up to nearly $30. Additionally, the average automated teller machine fee has risen to nearly $2, an increase of more than 10 percent in one year.

The average amount American consumers have to keep in their checking accounts to avoid paying monthly account fees was also up 4 percent from the year before, to more than $3,400.

With all of these changes, consumers are feeling the pinch and the Federal Reserve is looking at additional regulations.

"Economic illiteracy is at the heart of our current economic crisis," said James Bowers, managing director for CEEL. "As banks continue to raise account and overdraft fees, it is more important than ever to read the fine print, create (and stick to) a family budget and learn all the facts before taking on new financial burdens, like opening a credit card account or purchasing a car.''

A December 2008 study from CEEL highlights showed that a disturbing number of Americans are unable to answer simple questions about borrowing, interest rates and even basic math. Many respondents also admitted to making poor decisions with their own finances.