Selasa, 23 Februari 2010

Free overdraft Protection - An FAQ

Read all the fronts of major newspapers or turn on any news site or a blog and can not escape hearing about people have complaints about programs overdraft protection

In theory, overdraft protection is a good idea. In theory, what is communism. This is a problem, or work in real life the way it sounds on paper. (Sorry, Karl Marx).

When signs of an average person to get a new checking account, are automatically enrolled in overdraft protection programs. Most people are not even aware that they will join the program because the marketing model is configured as an "opt out" option. Selecting this means you must tell the bank employees do not want to enroll in the program. Put another way: if you or say anything, you are automatically enrolled.

Anyway, in the face of things, protected sounds like a good thing, right? After all, if your bank can not protect your funds, you?

Well, it's true: the overdraft protection programs protect you from having your charges to debit cards rejected the point of sale when the balance gets too low. However, the bank then turns around and immediately charged a fee for protection. Cynics will say to us that a little like paying the mob for protection if you have a small business in a questionable part of town: in both cases, feel free to pay, but price is high and not feel like you should do in the first place.

This is the problem with overdraft protection and what to do about it:

1. Really no overdraft protection is a myth;

There are a number of banks that offer free overdraft protection. The problem is that the end of the week, month or year (depending on the buying habits of customers), most people realize they have paid hundreds of dollars in fees owed to the bank. $ 25 - $ 35 each, the fees actually ad up.

2. It is hard to fight with your bank about the charges (and win):

From a bank in the alleged unfair overdraft charges is something that many have attempted but few are successful. Remember, this is big business for banks (to the tune of $ 25 billion per year in the United States only). This is not something that banks want to give up easily.

3. All the big banks are doing:

If you are shopping for a new checking account that does not come with a program found between any of the national bank, which has a hard time succeeding. All major banks and a large proportion of small, medium and show your overdraft protection as a more or less mandatory offer, with some exceptions. Only some recent offer opt-out "(and in some cases, opt-in) decision.

Fortunately, there are banks that offer overdraft protection does not require you to pay a fee overdraft - even if you overdraw your account. Important: you have to look beyond the big banks to find them. Some banks require you to pay a low monthly fee for its "no pay" services overdraft protection. But when you take into account the saving not required to pay a large fee overdraft month a month, it is a much cheaper option for most customers in the bank.

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