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Social Security beneficiaries have seen record high cost-of-living adjustments in recent years due to high inflation.
But that may end in 2024, experts predict.

Drazen Zigic | Istock | Getty Images

As the rate of inflation continues to fall, Social Security beneficiaries may expect to see a much lower cost-of-living adjustment for 2024.
The Social Security COLA may be 3%, according to a new estimate from The Senior Citizens League, a nonpartisan senior group, based on new consumer price index data for June released on Wednesday.

The estimate is higher than the 2.7% increase for 2024 the group projected last month due to changes in the average monthly rate of inflation, according to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.
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Separately, the Committee for a Responsible Federal Budget issued its own Social Security COLA estimate on Wednesday that anticipates a benefit increase for 2024 in the range of 2.6% to 3.3%.
The 3.3% increase would happen if recent inflation trends continue, according to the public policy organization focused on federal budget and fiscal issues. A lower 2.6% rise would happen if there is no net inflation for the rest of the year, according to the forecast.
The projected increases to benefits for next year would fall short of the 8.7% rise beneficiaries saw in 2023 — the highest boost in four decades. In 2022, beneficiaries saw a 5.9% increase, which was also a record increase at the time.

Social Security benefits rose by more than $140 per month on average starting in January, according to estimates from the Social Security Administration. The increase applied to about 70 million Social Security and Supplemental Security Income, or SSI, beneficiaries.
The purpose of the cost-of-living adjustment is to ensure benefits keep up with inflation.
The largest recorded COLA — 14.3% — went into effect in 1981. In other years — 2010, 2011 and 2016 — beneficiaries saw no benefit increases.

3 more months of data before official COLA

To be sure, the estimate is preliminary and may change before the Social Security Administration announces the COLA for 2024 in October.
“It is not uncommon for this average monthly rate to change,” Johnson said. “That’s what changes every single month and that’s why the COLA estimate changes.”
The consumer price index rose 3% from one year ago as of June, according to data released Wednesday.

The Social Security Administration uses a subset of that index — the consumer price index for urban wage earners and clerical workers, or CPI-W — to calculate the annual COLA.
The COLA is based on the percentage change in the CPI-W from the third quarter of last year to the third quarter of the current year. If there is no increase, there is no COLA.
The possibility that the COLA could be zero next year looks unlikely, Johnson noted.

2023 COLA has led to ‘some catching up’

The 8.7% cost-of-living adjustment has outpaced year-over-year increases in the CPI-W for every month since the increase kicked in in January. The latest June data shows the CPI-W is up 2.3% over the last 12 months.
In contrast, the 5.9% boost to benefits in 2022 mostly was behind the pace of inflation.
“There has certainly been some catching up that has occurred,” Johnson said of this year’s benefit increase.
However, retirees and other beneficiaries may find the cost-of-living adjustment doesn’t necessarily match up with the cost increases they personally see.
“It’s a very unusual occurrence for it to ever really match up very well,” Johnson said.
About 53% of beneficiaries have said their actual costs have risen more than the dollar amount of their cost-of-living adjustments, according to The Senior Citizens League’s research. More

The deadline for past-due filings for 2019 is approaching with an estimated $1.5 billion in unclaimed refunds up for grabs.
The median refund is $893, according to the IRS, with higher payments in certain states.
The last chance to file or amend your return from 2019 and claim your refund is July 17.

damircudic | Getty

There’s a key tax deadline approaching for past-due filers, with an estimated $1.5 billion in unclaimed refunds up for grabs.
Nearly 1.5 million taxpayers still have pending refunds from 2019, with a median payment worth $893, according to the IRS. The last chance to file or amend 2019 returns to claim your money is July 17.

Falling early in the Covid-19 pandemic, the 2019 filing season may not have been a priority for some Americans, said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. “But the fact is, you’re probably leaving money on the table.”
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Typically, there’s a three-year deadline to claim refunds for unfiled returns. But filers have more time for 2019 because of the Covid-19 pandemic.
Filing 2019 returns could yield “thousands of dollars,” Lucas said, especially for those claiming the so-called earned income tax credit, a tax break for low- to moderate-income workers.
The earned income tax credit is “refundable” because you’ll still qualify for a refund when the credit exceeds taxes owed. The tax break may be worth up to $6,557 for eligible filers. “It’s pretty substantial,” Lucas added.

However, a lot of taxpayers don’t realize they’re forfeiting refunds by missing the three-year filing deadline, said Sheneya Wilson, a certified public accountant and founder of Fola Financial in New York. After July 17, unclaimed refunds for 2019 become the property of the U.S. Department of the Treasury.

How to start the filing process

Step one in filing your 2019 return is gathering the necessary tax documents. “The first thing that we do as a firm is ask clients to go into their IRS.gov portal,” Wilson said.
You can login to download IRS transcripts, such as the wage and income transcript, which includes W-2s and 1099s. You can access IRS transcripts for the current season and three prior years.
“For many taxpayers, this is by far the quickest and easiest option,” according to the IRS.

If you’re missing forms for income, you can contact your current or past employer. “Most intermediaries and corporations are required to keep tax documents on hand for a minimum of three years,” Wilson said. “So, they should be able to furnish those documents upon request.”

Take another ‘quick look’ at 2019 returns

The July 17 deadline is also the last chance to amend your 2019 tax return, said Lucas. “It wouldn’t hurt to take another quick look at your 2019 returns” for missed opportunities, he added.
For example, you may have skipped dependents, pre-tax individual retirement account contributions or health savings account deposits.
“If you forgot to put something on the return, you only have three years to get it back,” Lucas said. More

Immediately after the Supreme Court struck down President Joe Biden’s student loan forgiveness plan, Biden said his administration would pursue a new path to deliver the relief.
But experts said the alternative strategy could take a year or more to implement, and is likely to face the same legal challenges the first attempt did.
Still, “there are a number of ways it could go differently,” said Luke Herrine, assistant professor of Law at the University of Alabama.

President Joe Biden announces new actions on June 30, 2023 to protect borrowers after the Supreme Court struck down his student loan forgiveness plan.
Chip Somodevilla | Getty Images

Why did the first forgiveness attempt fail?

When the president rolled out his plan in August 2022 to forgive as much as $20,000 in education debt for tens of millions of Americans, he pointed to the Heroes Act of 2003 as his legal justification. That law was passed in the aftermath of the 9/11 terrorist attacks, and grants the president broad power to revise student loan programs during national emergencies.

The Covid pandemic was such an emergency, the administration said. The U.S. Department of Education warned that the crisis had left millions of borrowers in a worse off financial situation and that there could be a historic rise in delinquencies and defaults without its loan cancellation.
Biden’s plan faced at least six lawsuits from Republican-backed states and conservative groups, most of which accused him of executive overreach. At an estimated cost of $400 billion, the policy would have been among the most expensive executive actions in U.S. history.

Two of the legal challenges made it to the Supreme Court: one brought by six GOP-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — and another backed by the Job Creators Network Foundation, a conservative advocacy organization.
It was the states’ case that successfully blocked Biden’s program in the end.
“Six states sued, arguing that the Heroes Act does not authorize the loan cancellation plan,” wrote Chief Justice John Roberts in the majority opinion for Biden v. Nebraska. “We agree.”
″’Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?'” Roberts wrote. “We can’t believe the answer would be yes.”

What is Biden trying now?

So why didn’t Biden just use the HEA from the start?

A few reasons.
The Biden administration probably first attempted to carry out its plan with the Heroes Act because it specifically addresses national emergencies. The country was in the middle of one of the biggest public health crises in its history.
When Herrine was writing his paper, “The Law and Political Economy of a Student Debt Jubilee,” he didn’t consider the Heroes Act as a way to cancel education debt simply because the country wasn’t in an emergency state at the time, he said.
“It’s a statute that’s meant for extraordinary circumstances,” Herrine said.
Another appealing factor was that the Trump administration had used the same authority to pause federal student loan payments at the start of the pandemic, Herrine said.
“There’s precedent, right?” Herrine said. “And indeed it was a Republican administration that did it.”

And because the Heroes Act is an emergency-time measure, it doesn’t require the lengthy rulemaking process that the Higher Education Act typically does (more on that to come).
Biden had hoped to move quickly canceling people’s student debt, promising people the relief within six weeks of them completing their paperwork.

How long could this new path take?

It won’t be speedy, that’s for sure.
Unlike Biden’s first attempt to forgive student debt quickly through an executive order, this time he’s turning to the rulemaking process. That procedure is lengthier, typically involving a public comment period and other time-consuming steps.
“Issuing new regulations can take as long as a year,” Kantrowitz said.
“If the Biden administration is successful in providing loan forgiveness under the HEA,” he went on to say, “borrowers could see forgiveness around the time of the election.”

Why would this round end any differently?

It’s unlikely that Biden’s Plan B for student loan forgiveness will be successful, Kantrowitz said.
He expects the president’s second attempt at forgiving student debt to be met by many of the same lawsuits as the first. And if those challenges make it to the Supreme Court again, borrowers can brace for déjà vu.
Herrine agreed that was a plausible scenario.
“The Supreme Court is going to be skeptical of basically any interpretation,” Herrine said.
However, he added, “there are a number of ways it could go differently.”

The Supreme Court is going to be skeptical of basically any interpretation.

Luke Herrine
assistant professor of Law at the University of Alabama

For one, the president didn’t go through the rulemaking process before. “And those are the sort of things that courts are supposed to defer to more,” Herrine said.
During the procedure, the Biden administration may also narrow the scope of his forgiveness plan. For example, he could decide to specify that only those who’ve already been paying their loans for a long time or who’ve repeatedly defaulted, are eligible.
“That would be a relief for a lot of people and I think it would be easier to justify in front of a court that is skeptical of broad authority,” Herrine said.
Even if this round leads to failure again, Herrine doubts the push for student loan forgiveness will fade anytime soon.
“I think we’re going to see more momentum in Congress and maybe some more alternative means to do it,” he said. “It’ll be hard to put the toothpaste back in the tube.” More

The consumer price index was up 3% in June from 12 months earlier, the U.S. Bureau of Labor Statistics said Wednesday in its monthly inflation report.
It’s the smallest increase since March 2021, around the time when pandemic-era inflation began rising quickly.
The moderation in inflation has been broad-based, and there are encouraging signs looking ahead, economists said.
The Federal Reserve is still expected to raise interest rates at least one more time.

A shopper at Lincoln Market in Brooklyn, New York, on June 12, 2023.
Michael M. Santiago | Getty Images News | Getty Images

Inflation slowed sharply in June to its slowest pace in more than two years, translating to less of a pinch on the average consumer’s wallet thanks to price relief across categories like energy, groceries and housing.
Inflation measures how quickly prices are changing across the U.S. economy.

The consumer price index increased 3% in June relative to a year earlier — a slowdown from 4% in May, according to the U.S. Bureau of Labor Statistics.
The CPI is a key barometer of inflation, measuring prices of anything from fruits and vegetables to haircuts and concert tickets. June’s reading is the smallest 12-month increase since March 2021 — around the time when alarm bells started sounding about fast-rising prices in the pandemic era — and a significant pullback from 9.1% in June 2022.

The report “makes a strong case that inflation is headed back into the bottle,” said Mark Zandi, chief economist at Moody’s Analytics.
Easing price pressures thus far are largely attributable to the fading effects of supply shocks caused by the Covid pandemic and the Russian war in Ukraine, Zandi said.
The decline in the inflation rate doesn’t mean household expenses have fallen in aggregate; it means they aren’t rising as quickly.

And that’s good news for consumers: The average worker’s earnings growth is now outpacing inflation, translating to an increase in their standard of living after two years of declines. Hourly earnings increased 0.2%, on average, from May to June after accounting for inflation, according to BLS data.
While inflation is on a downward trajectory, it remains above the Federal Reserve’s long-term target of around 2%.
“I think inflation is moving to a better place, but we’re not in the Promised Land of the 2% target,” said Mark Hamrick, senior economic analyst at Bankrate. “We know the journey is progressing, but it’s not yet over.”

‘Encouraging’ inflation signals moving forward

The inflation slowdown has been broad-based, Zandi said.
“It’s food, it’s energy, vehicle prices, the cost of housing is slowing,” he said. “Pretty much across the board, we’re seeing a moderation in price increases.”
Gasoline prices have fallen dramatically from a spike in the first half of 2022 that was a result of Russia’s invasion of Ukraine. Prices at the pump are down almost 27% in the past year, according to the BLS. They rose slightly — by 1% — from May to June.

Grocery price inflation is also down significantly from its peak around 14% last summer, which had been the highest rate since 1979. “Food at home” prices are up about 5% in the past year and were flat from May to June, according to the BLS.
But food and energy prices can be volatile. That’s why economists use a measure that strips out such categories to get a better sense of inflation’s trajectory going forward.
The measure — so-called “core CPI” — hit a 20-month low of 4.8%, according to Andrew Hunter, deputy chief U.S. economist at Capital Economics. And it’s “potentially even more encouraging than it looks,” as wholesale auction data for used cars points to a sharp decline in prices over the next couple of months, he said in a research note.
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The “core” measure also includes housing, which is the biggest expense for the average consumer.
The “shelter” index was the largest contributor to inflation in June, accounting for 70% of the monthly increase, according to the BLS. Shelter prices are up nearly 8% in the past year, but moderated from May to June. Economists say it’s a near certainty that housing prices will continue to fall through the second half of the year.
At the current pace of inflation, the core CPI metric should fall back to the target level by this time next year, Zandi said.

We know the journey is progressing, but it’s not yet over.

Mark Hamrick
senior economic analyst at Bankrate

“Notable” increases in annual inflation rates include motor vehicle insurance (up 16.9%), recreation (4.3%), household furnishings and operations (3.6%), and new vehicles (4.1%), according to the BLS.
However, several categories actually saw deflation — meaning consumers saw average prices fall — in the month from May to June, the BLS said. They include airline fares (which declined 8.1% in that period), which followed declines in April and May, too. There was also a 0.5% monthly decline in the “communication” index, which includes expenses such as phones and computer software.

Inflation is a ‘complicated phenomenon’

Inflation during the pandemic era has been a “complicated phenomenon” stemming from “multiple sources and complex dynamic interactions,” according to a paper published in May and co-authored by Ben Bernanke, former chair of the U.S. Federal Reserve, and Olivier Blanchard, senior fellow at the Peterson Institute for International Economics.
At a high level, inflationary pressures — which have been felt globally — are due to an imbalance between supply and demand.
It’s largely a three-pronged story in the U.S., said Stephanie Roth, senior markets economist at J.P. Morgan Private Bank.
The first is inflation among physical goods.

Consumer prices began rising rapidly in early 2021 as the U.S. economy reopened after its Covid-induced shutdown. Americans unleashed a flurry of pent-up demand for dining out, entertainment and vacations, aided by savings amassed from government relief, months of curbed spending and rock-bottom borrowing costs.
Meanwhile, the rapid economic restart snarled global supply chains. The supply of goods couldn’t keep up with consumers’ zest to spend. The result was fast-rising prices.
The second prong is war in Ukraine, which exacerbated backlogs in the global supply chain and fueled higher prices for food, energy and other commodities, said Roth.
The third is inflation for “services,” a category that includes housing and labor-intensive service businesses like restaurants and hotels.

Pretty much across the board, we’re seeing a moderation in price increases.

Mark Zandi
chief economist at Moody’s Analytics

As the economy reopened after the pandemic, businesses rushed to hire workers, and job openings surged to record highs. That demand tilted the job market in favor of workers, who had ample opportunities. They saw wages grow at their fastest pace in decades as employers competed to hire them.
That strong wage growth has nudged employers, especially labor-intensive service businesses, to raise prices to help compensate for higher labor costs, economists said. There are signs that labor dynamic is easing, though — which should put downward pressure on overall inflation.
The Federal Reserve has been raising borrowing costs aggressively since early 2022 to rein in demand among consumers and businesses, and ultimately help bring inflation back to its 2% annual target. The central bank is expected to raise interest rates at least once more. More

Not only are tips getting bigger in the U.S., but Americans also tip for a wider range of services.
In other countries, however, a gratuity remains a small, often optional gesture.
Here’s how much people tip in some of the world’s top travel destinations.

Owen Franken | Corbis Documentary | Getty Images

Some U.S. workers rely on tips, some don’t

In most other countries, including throughout Europe, “tipping remains a small gesture of gratitude,” said Jaime Peters, Maryville University’s assistant dean of accounting, finance, and economics. That’s in contrast to the U.S., where “tipping is almost obligatory.”
In part, that’s because tips make up a larger part of workers’ pay in the U.S., particularly in industries like entertainment, food service and leisure and hospitality.  

In fact, in some of those jobs, workers make less than minimum wage because they are considered “tipped employees.”

Under federal law, employers can pay workers as little as $2.13 per hour — much less than the minimum wage — if the tips they receive bring them up to a baseline salary. (Some states are now increasing the hourly minimum wage for tipped employees or eliminated tipping wages altogether.)
This applies primarily to restaurant workers, although other employees who receive more than $30 a month in tips may qualify.
“There are people other than servers that are getting a substandard wage but not many, it’s mostly waiters and maybe bartenders,” Lynn said. 

For these workers, tips can boost wages by about 25%, according to data from payroll platform Gusto.
“Tips play a significant role in compensation, although it can vary quite a bit,” said Luke Pardue, an economist at Gusto. 

Here’s how much people tip around the world

In other countries, that’s not the case. Workers don’t rely on tips for income and therefore a gratuity remains just that, a token of gratitude.
Before heading abroad, Peters advises travelers to research the tipping guidelines and standards at your destination and carry both cash and credit cards so you can tip appropriately.
From Paris to Puerto Vallarta, here’s a look at the tipping expectations in some of the top travel destinations around the world, based on TripAdvisor data pulled for CNBC: More

Credit card interest rates have climbed to record levels.
That’s bad news for households that carry balances from month to month.
These tips can help debtors break the borrowing cycle.

Asiavision | E+ | Getty Images

The Covid-19 pandemic separated the haves from the have-nots when it comes to finances.
Research shows that trend is continuing when it comes to debt, particularly credit cards.

More than one-third of Americans — 35% — say they are carrying their highest level of debt ever or close to it, according to a Northwestern Mutual survey of 2,740 adults.
The top source of personal debt, excluding mortgages, is credit card debt, with 28% of respondents, the research found.
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On the other hand, 43% of adults with personal debt say those balances are at their lowest level ever or close to it.
The results reflect the aftermath of the Covid-19 pandemic that posed financial challenges for some, such as reduced or lost employment, and reduced financial pressures for others, with lower mortgage rates and the pause of federal student loan payments, noted Alap Patel, a Chicago-based wealth management advisor at Northwestern Mutual.

“We were all in the same storm, but not everyone was in the same ship,” Patel said.

Credit card interest rates at record highs

With federal student loan payments set to restart in October, credit card balances also pose a big risk for some individuals and households, according to Ted Rossman, senior industry analyst at Bankrate and CreditCards.com.
The average credit card debt is $5,733 per person, according to TransUnion. Notably, Americans have set a record for total credit card debt with $986 billion in the fourth quarter of last year — which held constant in the first quarter, Rossman noted.
“Every other time in the past 20 years, credit card debt fell in the first quarter,” Rossman said
That speaks to the challenges of high inflation and higher interest rates, he said.

“It’s just a tough combination for a lot of people,” Rossman said.
Credit card interest rates now average 20.55% — the highest since Bankrate started tracking them in 1985, he said.
“Credit card rates rose more last year than any other year on record,” Rossman said.
The Federal Reserve is expected to continue to raise interest rates, which would make interest on those debts even more expensive.

‘The minimum payment math is brutal’

Bankrate’s research has found roughly half of credit card holders are paying their credit card bills in full every month, which means they are benefiting from the rewards and buyer protections those accounts offer without compromising their personal bottom lines.
Yet the other half of credit card borrowers are carrying expensive debt that can really add up.

A credit card borrower with the average $5,733 credit card balance at 20.55% will be in debt for over 17 years if they make just the minimum payments every month, according to Rossman.
They will also pay about $8,400 in interest on top of the $5,733 balance, he said.
“The minimum payment math is brutal,” Rossman said.
To shed those balances sooner, these tips can help.

1. Opt for zero percent balance transfer offers

The top tip for credit card debt holders, according to Rossman, is to try to transfer your credit card balance to another card offering a 0% introductory rate, which may last as long as 21 months. “Despite this rising rate environment, these offers remain abundant,” Rossman said. However, you will need good to excellent credit to qualify.

2. Come up with a debt payoff plan

When it comes to paying down credit card debt, two plans are typically popular — the snowball or avalanche methods, noted Patel. The snowball method consists of paying the smallest debts first, while the avalanche approach calls for prioritizing the highest interest rate balances. Alap said he advises his clients to pick the method likely to be the most successful for them.

3. Seek professional help

Even your credit history is not stellar, there are other resources that can help, Rossman said.  Non-profit credit counseling and sources like Money Management International or GreenPath Financial Wellness may help you knock down your interest rate to as low as 7% to 8% over four to five years, Rossman said.

4. Keep saving

Even as you’re attacking credit card balances or other debts, it’s important to set cash aside, Alap said. An emergency fund with three to six months’ of expenses is ideal. Credit card debt holders should strive for at least two months’ expenses to fall back on in a pinch, he said. More

The Nasdaq 100 index comprises 100 of the largest nonfinancial companies that trade on the exchange and is often seen as a proxy for growth stocks.
The index has surged about 37% year to date, well above the S&P 500 and the Dow Jones Industrial Average.
The three biggest names appear to account for more than 30% of the index combined.

Michael Nagle | Bloomberg | Getty Images

The rapid rise of a few already-massive tech stocks this year is causing Nasdaq to make unusual adjustments to its popular growth index.
The company announced July 7 that it will do a special rebalance of the Nasdaq 100 Index, which will take effect before the market opens July 24.

The Nasdaq 100 index comprises 100 of the largest nonfinancial companies that trade on the exchange and is often seen as a proxy for growth stocks. The index has surged about 37% year to date, well above the S&P 500 and the Dow Jones Industrial Average.
Nasdaq said a special rebalance can be used to “address overconcentration in the index by redistributing the weights.”
While the index is already rebalanced on a quarterly basis, Nasdaq tries to keep the five biggest stocks below a 40% combined weighting in one rebalance per year designated as the annual adjustment, according to the firm’s methodology. The five biggest stocks appear to be over that threshold currently, according to the holdings of the Invesco QQQ ETF, which tracks the index.

Invesco QQQ Top Holdings

Ticker
Stock
Weight in fund

MSFT
Microsoft
12.67%

AAPL
Apple
12.31%

NVDA
Nvidia
6.97%

AMZN
Amazon
6.73%

TSLA
Tesla
4.41%

Source: Invesco

The QQQ’s holdings show how concentrated the index has become. The three largest positions — Microsoft, Apple and Nvidia — account for more than 30% of the fund combined, as Nvidia’s stock price has nearly tripled this year. The top 10 holdings account for a combined weighting of nearly 59%.
This is the third special rebalance on record for the Nasdaq 100. The company said it will announce new weightings July 14.

“The special rebalance is part of the Nasdaq-100 methodology and ensures that index-tracking funds maintain compliance with fund diversification rules. Nasdaq-100 special rebalances have taken place previously in 2011 and 1998,” Cameron Lilja, global head of index product and operations at Nasdaq, said in a statement.

Stock chart icon

The Nasdaq 100 has risen sharply this year.

There are several index funds that track the Nasdaq 100, including the QQQ, which has about $200 billion in assets under management. More

The Consumer Financial Protection Bureau fined Bank of America $150 million for charging customers so-called junk fees, among other violations.
President Joe Biden has said his administration would crack down on junk fees — including those from banks as well as hotels, airlines and other service providers.
And yet, when one fee goes down another pops up, says Bankrate’s Ted Rossman, in “a game of whack-a-mole.”

What are junk fees?

Junk fees are additional, often hidden, charges that can come from a range of lenders. They are not typically included in the initial price of a transaction but are tacked on at the time of payment.
“Consumers are encountering these ‘surprise’ charges more often than they might expect, in everything from concert ticket surcharges to airline seat selection fees, credit card late fees, bank overdraft fees, hotel resort fees and more,” according to Ted Rossman, senior industry analyst at Bankrate.

Yet even if these fees were capped or even banned entirely, it’s unlikely that consumers would save money as a result, he said.

Overdraft fees are a good example of a ‘game of whack-a-mole’ when it comes to fees.

Ted Rossman
senior industry analyst at Bankrate

“Overdraft fees are a good example of a ‘game of whack-a-mole’ when it comes to fees,” Rossman said.
When many financial institutions lowered their overdraft and non-sufficient funds fees or eliminated them altogether, the average overdraft fee fell while ATM surcharges jumped to a record high, Bankrate found.
In most cases, even with more transparency, the all-in cost to consumers would likely remain the same, according to Rossman.

Cracking down on junk fees

President Joe Biden has said his administration would crack down on junk fees — including those from banks, as well as hotels, airlines and other service providers.
“Junk fees may not matter to the very wealthy, but they matter to most other folks in homes like the one I grew up in, like many of you did,” Biden said in his State of the Union address earlier this year. “They add up to hundreds of dollars a month.”
Biden also called on Congress to pass the Junk Fee Prevention Act, which will reduce unexpected charges, such as airline booking fees; service fees for concert tickets; early termination fees for TV, phone and internet services; “resort fees” at hotels; and “excessive” credit card late fees.
Last year, the CFPB said it was scrutinizing certain fees that catch customers by surprise — and are “likely unfair and unlawful,” according to the agency.

The consumer watchdog proposed a new rule prohibiting banks from charging surprise overdraft fees on debit transactions and reducing typical late fees from roughly $30 to $8, saving consumers as much as $9 billion a year, according to the White House.
“Despite recent progress in addressing overdraft fees, the job is far from complete,” Nadine Chabrier, the Center for Responsible Lending’s senior policy counsel, said in a statement.
“The Consumer Financial Protection Bureau took a big step by banning surprise overdraft fees,” she said. “We are encouraged that the consumer bureau announced it will take additional steps, and we urge the bureau to place strong limits on the size and frequency of these fees.”
More than a quarter of checking account holders, or 27%, are regularly hit with fees, which can add up to an average of $24 per month, or $288 per year, according to a another survey from Bankrate. 
The average overdraft fee costs $29.80, Bankrate’s research found, while the average nonsufficient funds fee is $26.58.

Some banking interest groups countered that offerings such as overdraft protection provide a much-needed safety net.
“The president’s use of the term ‘junk fee’ is overly broad and ignores the needs of low-income and middle-income consumers who depend on these services to resolve short-term financial difficulties,” Jim Nussle, president and CEO of the Credit Union National Association, said in a statement.
“It does not consider the costs involved in providing needed financial services that consumers depend on.”
Without the option of overdraft protection, “people are more likely to turn to predatory lenders, hurting the same people the administration seeks to help,” Nussle said.
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