Banks using “high to low” check processing to maximize overdraft fees

A survey of 2,000 banks by the Wall Street Journal showed that 16% of them still use a form of check processing called “high to low” that is frowned upon by regulators.

Under high to low processing, a bank takes all the checks you’ve written and processes the biggest ones first. That system will exhaust your balances more quickly than if the bank processed the checks as they came in. So it will generate more bounced checks, with overdraft charges.

If you’ve been getting overdraft charges, ask your bank if they use high to low processing. If the answer is yes, it ‘s time to switch banks.

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