Overdraft protection can be a great service to use if you tend to run low on funds during certain parts of the month or are in an emergency situation. There are typically fees associated with this banking service, but its usefulness can drastically outweigh any costs. Overdraft protection essentially functions as a line of credit offered by a bank that customers can use in a bind.
Description of Overdraft Protection
There may be moments when you make a purchase and do not have sufficient funds in your checking account. The experience of having your credit card denied in a store can be mortifying. When you sign up for overdraft protection, a bank will pay for any purchases that you make with a line of credit. You will eventually have to make a payment to your bank for the purchase, but you will be able to proceed with the purchase without experiencing any humiliation.
Overdraft protection can be very useful when you are dealing with an emergency situation. If you have an emergency, you may use overdraft protection to make a critical purchase. The bank may withdraw funds from another account that you hold with the bank, such as a checking, savings, or loan account. Your bank may also issue a line of credit that can be used to cover the cost of the purchase.
Costs of Overdraft Protection
Overdraft protection service may require a monthly or one-time fee. Every bank is different in the costs it charges for overdraft protection services. Your bank may offer this service free of charge. Other banks may charge a significant fee each time that you need to use it. You should also be aware of how your bank charges fees for overdraft protection services. Some banks will charge an individual fee for each purchase that you make. Other banks will charge only one fee for any overdraft services that you require for a period of time.
Opting Out
Opting out of overdraft protection services is very easy. Generally, all you need to do is speak with a banking professional, call your bank, or login to your online banking account. You can typically adjust your overdraft protection settings on your account. If you have any difficulties in locating the settings for your account, you should contact a customer service agent with your bank. Your bank may also offer online chat services that can be convenient when you need help opting out.
