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Did Banks Do Enough to Help? Examining Bank Fee Patterns During COVID-19

Did you receive a smaller paycheck in March? Did you receive a paycheck at all?

And did you find yourself still struggling to pay bank fees in spite of your bank’s “fee relief” measures?

You’re not alone.

Here’s a look at how much the typical user of Harvest Platform spent on bank fees in February and March. 

Fig. 1

Fig. 1

While spending on overdraft fees, late fees, credit card interest charges, and ATM fees decreased, average spending on account maintenance, monthly service fees, and insufficient funds (NSF) fees actually increased, which suggests that:

  1. Bank account balances were decreasing—possibly due to loss of income—which may explain why spending on account maintenance and monthly service fees increased. Lower balances probably also led to a higher likelihood of people incurring NSF and/or overdraft fees.
  1. People either had their incomes reduced or increased their spending, hence the rise in NSF fees, which banks can still charge you if you’re not opted into overdraft protection. 

In this article, we show that during the month of March, while incomes dropped and spending decreased, people were still dedicating a similar proportion of their overall spending to bank fees.  

This implies that in March, with people having fewer dollars to spare overall, bank fees actually dealt an even heavier blow to the financial livelihoods of people who were paying them.

In fact, in late March, bank fee spending increased at a disproportionate rate to overall spending, suggesting that people had unpaid fees that were not waived and thus had to be paid off.

This is a surprising find considering the fact that numerous bank fee relief measures were introduced in March, which is why with this insight in mind, we question whether banks did enough to help those with bank fees.  

We also provide some insight into whether this trend of bank fee spending may continue as lockdowns continue.

For exact numbers on how bank fee spending and overall spending changed throughout March and insights into what those numbers mean, read on.

Income Changes

This probably comes as no surprise but many of our users saw their incomes drop from March to April, probably due to the layoffs and furloughing following the COVID-19 lockdowns. This can be seen in the graph below, which shows our users’ daily income from February to April as a 7 day moving average (the y axis represents income, which we took out to protect our users’ personal information).

Fig. 2

The following graph, which shows percentage changes in daily income as a 7 day moving average, confirms that income has decreased. This can be seen in the fact that positive spikes in income in March are not as high as spikes in February (20% in March vs. 20-30% in February) prior to the COVID-19 lockdowns and layoffs. 

Fig 3.

So now that we’ve established that income did decrease in March, how has income affected overall spending and bank fee spending? Has overall spending decreased? Has bank fee spending also decreased, and if so, has it decreased significantly due to forced cut-backs and bank fee relief measures or has it decreased only slightly?

Overall Spending vs. Bank Fee Spending

Here’s a graph (Fig. 4) to show daily spending in comparison to daily spending on bank fees on a 7-day moving average basis. 

Dividing Fig.4 into three phases, we begin to see three monthly trends (note: there are two y axes to this graph - the one on the left represents daily overall spending and one on the right represents daily fee spending each with a different numerical scale).

Fig. 4


In February, overall spending initially dropped but then progressively increased, making higher and higher peaks.

Bank fee spending also followed the same pattern, falling at first but then rising until around February 20, which is when it abruptly drops.

This pattern of overall spending and bank fee spending suggests that at first, spending was resulting in bank fees, possibly due to accounts getting overdrafted and account balances falling below the threshold required for avoiding a monthly fee, and people were paying off old bank fees as they started to receive their paychecks. 

Gradually, with old fees getting paid off and bank account balances rising, bank fee spending drops from its peak.


In March, overall spending and bank fee spending both simultaneously show a downward trend.

Notice that bank fee spending no longer exhibits an inverted V-shaped trend as it did in February. Instead, it slowly trends downwards. Visually, it appears as if bank fee spending declines at a much slower rate than does overall spending. 

It’s here that we see the impact of reduced income, which reduces both bank fee and overall spending.

April Abnormalities

This is when spending dramatically spikes, probably due to the influx of stimulus checks. Bank fee spending also increases although the reason for that could be because a lot of those checks were used to pay off old bank fees.

So from our analyses of the three months, March yields the most interesting insights: 

  1. Income drops brought about reduced overall spending and also reduced bank fee spending, but the drop in bank fee spending is not as abrupt, meaning that people were continually spending on bank fees throughout March. 
  1. The flatness of the decline in bank fee spending may indicate that people struggled to pay off bank fees, and had to constantly shell out valuable funds to slowly pay off their bank fees.

Looking at bank fee spending as a percentage of overall spending, we see even more evidence to suggest that people were still continually spending on bank fees and were even struggling to pay off existing bank fees and/or were incurring more and more bank fees.

Fig. 5

In March, bank fee spending shows an upward trend with two peaks, one higher than the other. From March 1 to March 15, bank fee spending as a percentage of income increases, reaches 12% and then drops back down to 8%. That initial spike was probably not caused by overall spending, which actually declined from March 1 to March 15 (see Fig. 4). 

From March 15 to around March 23, bank fee spending as a percentage of income increases again, this time reaching the peak of 15% before dramatically dropping to around 5%. Again, overall spending continues to decline during this time period and yet bank fee spending as a percentage of overall spending continues to rise until March 23.

So what does this all mean?

From March up until late March, people were still dedicating a similar percentage of their overall spending to bank fees. In fact, that percentage kept rising even as overall spending kept falling, implying that bank fee spending did not decline as fast as overall spending. 

Moreover, from March 1 - March 23, while overall spending dropped by over 50%, bank fee spending only decreased by around 40% (see Fig. 4). Right after March 23, overall spending picks up by around 10%, which causes a more than 20% rise in bank fee spending. 

This relationship between bank fee spending and overall spending suggests the following conclusions:

Fig. 6

So were banks charging people fees all the way until late March even as people struggled with income loss?

With this graph, we see that spending in almost all areas of non-essential spending, with the exception of subscriptions, movies and other miscellaneous services, all of which rose far less than 20%. Meanwhile, combined spending in quite a few other areas of non-essential spending fell dramatically.  What does end up increasing is essential spending (groceries, insurance, etc.).

And yet up until late March, banks were still making people pay off their bank fees. 


Judging by how people were still paying off bank fees in late March, banks could have definitely introduced stronger fee relief measures in March to help offset the damage dealt to people’s finances. 

By showing that the figure for bank fee spending as a percentage of overall spending remained somewhat constant at its highest, and how overall spending in late March produced a much greater increase in bank fee spending, we question whether banks did enough to help offset the financial consequences (in absolute terms) of the COVID-19 lockdowns.

Now an alternative explanation could be that people were simply unaware that they could get their fees waived by calling their banks. This was something that we definitely noticed - that many weren’t sure if simply calling their banks would help get their fees waived. If banks were already waiving more past fees than usual in early March, they could have definitely been more vocal about their willingness to waive fees much earlier in March. 

A lot of people were also unable to reach their banks due to stresses on banks’ customer support infrastructure, which may also explain why so many customers struggled to get fee refunds in spite of the existence of fee relief measures. On our end, we also saw evidence of the delayed effects in fee relief measures in the form of delayed replies to refund negotiations that we conducted on behalf of our users. 

Moving forward, with banks introducing more effective fee relief measures, we do expect the bank fee spending as a percentage of overall spending to start dropping. We at Harvest Platform would most certainly hope for banks to start refunding more in past fees, but that remains to be seen. 

About the Author

Harvest helps increase the net worth of the 99% through artificial intelligence and financial automation. To date, Harvest has refunded over $2M in bank fees and interest charges to its members with the ultimate goal of increasing the net worth of everyday Americans by $1 trillion by 2030. Our platform starts with providing immediate relief through bank fee and interest charge refunds, orients a member's financial health with our proprietary PRO Index, and keeps track of net worth over time aided by our suite of financial tools. Check out our 8-step guide on "How to Build Wealth from Nothing" to get started on increasing your net worth.

Disclaimer: Harvest is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.