Overdraft protection can be a great tool to have for those little unexpected expenses that tend to pop up that require immediate funding. Overdraft protection is a small loan that your bank provides to you when you overdraw funds from your checking account when writing checks or using your debit or ATM card. You would think of it as a nice gesture that your bank is giving to you so freely and automatically without a fuss, however, when you notice all the fees you are being charged you may think differently.

In order to obtain overdraft protection on your account a credit card must be issued from the same bank of which your checking account resides in. Along with this feature fees will be required if you do happen to overdraw on your account and in comes your overdraft protection.

A couple facts:

-Overdraft protection transaction fees range anywhere from $25 - $35

-Each transaction made to make overdraft protection kick in and after will have a fee tacked on to it. If you purchase items from 4 different stores, you will be charged that transaction fee 4 times.

Overdraft protection can save you from bouncing checks and other fees that stores charge for bouncing checks, however, it can also end up costing you large sums of money if not careful. Always keep track of your spending!

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This entry was posted on Friday, June 16th, 2006 at 5:21 pm and is filed under Credit, Debt, Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.