Many consumers, in an effort to avoid ATM fees, take cash withdrawals during point-of-sale transactions at grocery stores or other retail establishments. While this may be a savvy way to avoid withdrawal fees, you should know that point-of-sale terminals generally won't warn you if you're about to overdraft and trigger an even larger fee on your account. Unlike an ATM fee of just a few dollars, overdraft charges can often be as high as $39.
Banks have the technology to warn consumers of insufficient funds or even decline transactions at the time of purchase, but they aren't required to do anything. Unfortunately, most banks choose to do just that, which is a major reason why an estimated 40 percent of all overdraft fees occur during point-of-sale transactions.
So, the next time the cashier asks if you would like some cash back when making a purchase, be sure to think twice before saying "yes".
