In recent years, the term “junk fees” has made its way into headlines, legislation, and everyday conversations about money. But what exactly are junk fees - and how do they show up in your bank account?

This article will break it down: what they are, where they come from, and why they matter to anyone trying to manage their money responsibly.

What Are Junk Fees?

Junk fees are unexpected or hidden charges added to the cost of a product or service, often without clear explanation, upfront disclosure, or a direct connection to the value received.

While these fees can show up in many industries - like travel, event ticketing, or telecom -they’re especially common in banking and financial services.

According to the Consumer Financial Protection Bureau (CFPB), junk fees are typically:

• Surprise charges that aren’t advertised in the base price

• Disproportionate to the cost of the service

• Difficult to avoid or opt out of
  

In short, they’re fees that feel more like a penalty than a fair exchange.

Common Junk Fees in Banking

Here are some of the most common junk fees consumers encounter in everyday banking:

1. Overdraft Fees

• Charged when your bank lets a transaction go through despite insufficient funds

• Often $30–$35 per occurrence

• Can compound quickly if multiple transactions go through
  
  
  

2. Non-Sufficient Funds (NSF) Fees

• Charged when a transaction is declined due to lack of funds

• May still incur a fee, even though the payment wasn’t completed
  
  
  

3. ATM Fees

• Includes both out-of-network ATM fees from your bank and surcharge fees from the machine’s owner

• Can total $3–$7 per withdrawal
  
  
  

4. Account Maintenance Fees

• Monthly charges for keeping an account open

• Sometimes waived if you meet minimum balance or deposit requirements — but often applied without notice
  
  
  

5. Paper Statement Fees

• $2–$5 per month for printed statements, even if you don’t use them

• Can usually be avoided by opting into e-statements
  
  
  

6. Early Closure or Dormancy Fees

• Charged for closing an account too soon after opening or leaving an account unused
  
  
  

Why Do Junk Fees Matter?

You might think $3 here or $10 there isn’t a big deal — but junk fees add up, especially for those living paycheck to paycheck. Here’s how they can hurt your finances:

They Interrupt Your Budget

A surprise $35 overdraft fee can derail your bill schedule, cause bounced payments, or even lead to additional penalties.

They Make It Harder to Build Savings

When you’re charged simply for accessing your own money, it becomes harder to set money aside for the future.

They Can Affect Your Credit

Fees that lead to missed payments or overdrawn accounts may result in negative credit reporting or collections.

They’re Often Charged When You Can Least Afford Them

Studies show junk fees are more commonly paid by people with lower incomes, limited access to credit, or variable income streams.

What’s Being Done About Junk Fees?

The CFPB, along with other federal agencies, has made junk fee reduction a policy priority. In 2024, the agency proposed and finalized rules to limit:

• Overdraft fees to $5 in large banks

• Credit card late fees to $8 or less

• Mandatory disclosure for any service that resembles a loan
  
  

While some of these rules are now under political and legal challenge, the pressure is building on banks and businesses to eliminate or reduce excessive fees.

Already, some banks — especially online banks and credit unions — have voluntarily removed many of these charges to stay competitive and transparent.

How You Can Protect Yourself

Even before regulation catches up, you can take steps to avoid or minimize junk fees:

• Choose fee-free banks: Look for institutions with no overdraft or monthly fees

• Use alerts and tracking apps: Monitor your balance and get notified before fees hit

• Understand your account terms: Ask about all potential charges when opening or managing an account

• Opt out of overdraft coverage: If you’d rather a transaction be declined than pay a fee

• Dispute unexpected fees: You have the right to ask for a refund or challenge charges that weren’t clearly disclosed
  
  
  

Choosing the Right Financial Partners

Junk fees may be small on the surface, but they reflect a bigger issue: the cost of complexity in modern banking. The more you know about where these fees come from and how to avoid them, the more control you have over your money.

As conversations continue in Congress and the courts, the best move you can make is to stay informed - and choose financial partners that are working for you, not against you.

Get started for free at Copiafy.com.