If you qualify and overdraw your checking account, the overdraft will be covered by the line of credit. In essence, this gives you the ability to borrow money to cover an overdraft. There usually is a fee charged when this occurs. In addition, you will be charged interest on the amount you borrow to cover the overdraft.
To reduce all overdraft-related fees, you should always track your balance as carefully as you can.
It may be possible to sign up for low balance alerts through your bank or other service providers. These alerts can help you know when you are at risk of overdrawing your account. If you have regular electronic transfers, such as mortgage payments or utility bills, make sure you know how much they will be and on what day they occur so you can ensure you have enough money in your account.
It's a big change for this burgeoning industry. And the CFPB estimates that amount will double again by The cards are widely sold at stores such as Wal-Mart and 7-Eleven, plus online and in payday lending and check cashing places; and appeal mainly to the "unbanked" — people who for one reason or another abandoned their checking account, had it canceled, or never got one in the first place. Traditionally, prepaid debit cards have been like cash: Once it's gone, it's gone.
Try to buy more than your balance can afford and the transaction will get declined — no costly overdraft fee. But soon when prepaid debit card companies offer a line of "overdraft protection" it will work just like a credit card: Go over your limit and the bank will cover you, then send you a bill and start charging a fee and interest.
The biggest prepaid debit card players say they've never charged overdraft fees and have no plans to start. Then send a written letter to the bank, confirming your request to opt out of overdraft protection. If your bank won't cooperate and you've lost a significant amount of money due to the unlawful charges, consider contacting a lawyer to resolve the issue. And remember, the bank can automatically enroll you in overdraft coverage for checks and regularly occurring automatic debts.
If your bank won't allow you to keep an account without this coverage, you'll need to keep careful track of how much money you have in your account to avoid incurring fees. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.
The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Grow Your Legal Practice. Meet the Editors. Most consumer advocates recommend against getting overdraft protection for ATM and debit card transactions.
What Is Overdraft Protection? An overdraft occurs when you write a check, use a debit card or ATM card in a transaction, or make an automatic bill payment for an amount greater than the balance in your checking or savings account Overdraft protection is a service offered by most banks, credit unions, and financial institutions as part of your checking or savings account contract. Should You Opt In?
Here's an example demonstrating how overdraft protection can get pricey. Unpredictability of Fees The CFPB study found that banks used a confusing set of rules to determine how they impose fees, order consumer transactions, and set coverage limits.
Higher Risk of Having Your Account Closed If a consumer runs up multiple overdraft fees and ends up with a negative bank account balance, the bank will eventually close that account. Have You Unwittingly Opted In? Talk to a Lawyer Need a lawyer?
0コメント