Author: Clark Lewis

American Multinational bank Wells Fargo has announced the arrival of its new small-dollar loans to its U.S customers.

This article will analyze the bank’s new small-dollar loans, its overdraft regulations and restrictions, and three ways to avoid unexpected overdrafts.

Let’s get started!

Wells Fargo Starts Small-Dollar Loans Amid Overdraft Scrutiny

Wells Fargo Small Dollar Loans

American Bank Wells Fargo will begin offering small-dollar loans to its online customers, the financial services corporation said, as overdraft payments and Biden-tagged “junk fees” continue to rouse criticism in the United States. 

The bank said that the loans are already being disbursed in a select range of markets and will be made available across the country by year-end. They are $500 and $200, with a flat rate of $20 and $12 for all eligible applicants.

Wells Fargo Overdraft Limit

Overdrafts are fees bank charges you whenever you withdraw an amount greater than what’s in your account. Each time you take an overdraft, the bank takes a loan to cover your expenses.

It then becomes your responsibility to cover the overdraft fee, which may sometimes end up higher than the withdrawn amount, and the overdrawn amount.

For a Wells Fargo customer, withdrawing extra and taking an overdraft can result in undesirable fees. That’s because the fees Wells Fargo charge mainly depend on the transaction type you make and whether you are already enrolled in its overdraft protection program.

Checking accounts under the bank are provided with standard overdraft settings. In the following paragraphs, we will go over the details of each transaction type. 

N.B: Customers signing up for the overdraft protection should expect to receive different fees.

ATM and Regular Debit Transaction

The standard setting for checking accounts is to reject ATM and regular debit transactions that surpass your account balance. Wells Fargo doesn’t charge you for refusing these transactions.

Checks and Other Recurring Bills

Like many other banks, Wells Fargo analyzes and judges with discretion when settling checks and regularly occurring payments. You wouldn’t have to pay a fee if it decided to reject a statement or recurring bill because of insufficient funds.

But if they accept either of such payments when you lack the appropriate funds, you’ll be charged a $35 overdraft fee. Your limit is three overdrafts daily with a limit of $105.

Lastly, unlike many other banks, Wells Fargo doesn’t charge recurring overdraft fees if your balance remains negative for several days.

How To Avoid Overdraft Fees

Overdraft charges are unnecessary and can significantly affect your finances, especially if you’re forced to pay them often. Nevertheless, there are various steps and methods that you can use to avoid these charges. 

1. Open an Account That Doesn’t Charge You

Alliant Credit Union, Ally Bank, and Capital One each operate checking accounts that no longer charge overdraft fees. If changing to a new bank saves you money in the long term, then doing so might be a good idea.

Opt For Automated Bank Alerts

One easy method to avoid overdrafts is to opt for automated notifications that alert you whenever your balance reaches a certain amount.

For instance, you can set up automated alerts to inform you whenever your balance falls below $300. So you can know to watch your spending until you deposit more funds into the account.

Sign Up For Overdraft Protection

With overdraft protection, your bank cancels any overdraft by transferring the necessary funds from your linked accounts. Most banks only permit linking additional accounts registered under them.

Summary

President Biden has promised to eradicate surprise fees like overdrafts and depositor fees that often catch consumers unaware. Many banks around the country have responded by discarding and providing overdraft protection programs that allow customers to opt away from such unexpected fees.

You can apply here to sign up for Wells Fargo’s small-dollar loans.