» more from Personal Finance  Overdraft Penalties  When we
overspend our account with a check or debit card purchase and
the bank covers it, we have to make good, right? Overdraft
penalties, which average from $30 to $34 nationwide,
theoretically act as a deterrent. That pays the bank's costs for
papering over our errors.  In fact, there is little correlation
between a banks' cost to administer bounced checks or
overzealous swipes. Overdraft fees, like most bank fees, are set
by what the competition is charging. Nor are overdraft penalties
related to going interest rates: charging $34 for covering the
average overdraft of $36 for a week (when banks usually hit
overdrawn customers with a second, "extended overdrawn balance"
fee) amounts to a 5,000 percent annual interest rate.  Photo:
iStock