Chart of the Day – 4.10.2009

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Via Felix Salmon, this chart shows how much overdraft charges cost you.  The bar on the left (labeled POS) is from point-of-sale debit card overdrafts.  Here are the numbers: the average overdraft is $17, it’s paid back in an average of five days, and the average charge is $35.  Result: you’re paying $1.94 for every dollar “borrowed.”  You’d probably need scientific notation to figure out the APR.

But here’s the kicker:

When debit cards first came into common use, they promised the convenience of a credit card without the cost, because debit card users were required to have the funds in their account to cover their purchase or withdraw cash. As recently as 2004, 80 percent of banks still declined ATM and debit card transactions without charging a fee when account holders did not have sufficient funds in their account. But banks now routinely authorize payments or cash withdrawals when customers do not have enough money in their account to cover the transaction, so debit cards end up being very costly for many account holders.

Italics mine.  This is just so you understand how deliberate this strategy is.  The banks could easily decline NSF transactions.  They used to.  But they don’t anymore because the fees from inadvertant overdrafts are so lucrative.  Alternatively, they could charge reasonable fees, since the actual administrative cost of overdrafts is minuscule these days.  But they don’t.

And who pays these fees?  Small account holders with modest incomes, of course.  That’s the modern banking industry for you.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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