May 3, 2011 at 12:29 PM ET
Short on cash? I know a quick and easy way you can get a short-term loan.
The catch: The interest rate is 5,000 percent.
Doesn't sound like much of bargain, but millions of Americans conduct such transactions every year with major U.S. banks in the form of overdraft fees. According to a new report by the Pew Health Group, the median checking account overdraft amount is $36, and the median overdraft penalty fee is $35 with a repayment period of seven days. That translates into the astronomically high annual percentage rate for this "service."
The Pew report gives more support to the not-so-shocking idea that America’s banks don’t really have their customers’ best interests at heart. Some highlights of the Pew report:
Pew reached its findings after examining more than 250 types of checking accounts offered online by the 10 largest U.S. banks. Click here for the report.