WASHINGTON – The fees that banks charge debit-card users who overdraw their accounts usually cost more than the items being bought.
That’s the result of a study that the Consumer Financial Protection Bureau released Thursday.
Large banks have generally charged a $34 penalty when people overdraw their debit-card accounts, even though most of the purchases involved were for less than $24. And the penalties are charged even though most accounts return to a positive balance within three days, the study found. Banks profit by collecting more than half their checking account income from these fees.
The study builds on a 2013 report that found that heavy overdrafters, on average, face $900 in additional costs each year.
Younger Americans who frequently use debit cards are more likely to be charged fees. More than 10 percent of accounts belonging to 18- to 25-year-olds are hit with at least 10 overdraft fees a year. Nearly 36 percent of accounts belonging to 26- to 45-year-olds face at least one fee.
Target picks Cornell to lead
NEW YORK – Target is bringing in an outsider as its CEO for the first time as the retailer fights to redefine itself to American shoppers.
The Minneapolis-based company said Thursday that it named PepsiCo executive Brian Cornell to the top spot, replacing Chief Financial Officer John Mulligan, who had been keeping the seat warm since May.
The announcement comes roughly three months after Target CEO Gregg Steinhafel resigned following a large data breach in the run-up to the holiday shopping season last year.
Vitaminwater changes flavor
NEW YORK – Coca-Cola is reversing course after fans of Vitaminwater complained about the drink’s new sweetener.
The Atlanta-based company promised Thursday the drink would go back to its previous taste after fans flooded Vitaminwater’s Facebook page with negative comments. The reversal comes just a few months after Coca-Cola had changed the sweetener in the drink to a mix of sugar and stevia, a low-calorie sweetener known for its metallic aftertaste.
The original Vitaminwater will start appearing on shelves this fal. Previously, Coca-Cola sweetened Vitaminwater with a mix of sugar and crystalline fructose. The change didn’t alter the calorie count, which remained at 120 calories per bottle.