The Right Way to Approach Overdraft Protection
Based on data released by the FDIC, the 10 largest banks in America collected $11.45 billion in overdraft and NSF fees from American consumers in 2017. What’s more, a recent survey by Moebs Services reveals that consumers paid a whopping $34.3 billion in overdraft fees in 2017 (this includes overdraft fees from big banks, smaller banks, and credit unions). This is the highest since the Great Recession in 2009, and a three percent increase from 2016.
How do you avoid these sorts of fees? Many banks now offer Overdraft Protection, but not all programs are the same.
What is Overdraft Protection?
An overdraft occurs when you write a check or swipe your debit card but don’t have enough money in your checking account to completely fund the transaction. Overdraft protection is a feature offered by banks to keep your checking account from over-drafting and incurring an overdraft fee.
An over-draft or non-sufficient funds (or insufficient funds) transaction can be expensive and disruptive. If a bank receives a check written on an account with insufficient funds, the bank can refuse payment and charge the account holder an NSF fee. Additionally, a penalty or fee may be charged by the merchant for the returned check. If you bounce a check, for example, you can incur a variety of charges or see your bank close your account in extreme cases, hurting your chance of opening a new checking account.
A great option to look for in Overdraft Protection is a line of credit. This option eliminates the fee. Not all banks offer the same program, so look for a bank where the only cost is the interest charged on the funds used for the time the balance is outstanding.
Jarrettsville Federal has now launched its newest product – Overdraft Protection. It is offered as a line of credit. There is no fee for this product, the only cost is the interest. The 18% rate is only charged on funds used for the time the balance is outstanding.
It is easy, and it will put your mind at ease.
So, if you are tired of the fees, stop by Jarrettsville Federal and open a checking account with Overdraft Protection.