Published: December 20, 2017
Overdraft protection is designed to cover your purchases if your account dips into the red. Let’s say you’re at a restaurant with friends and you have $100 in your checking account. You eat dinner and pay, only to find your electric bill cleared earlier than anticipated – so your account is now in the red. With overdraft protection, the difference is covered, but you’ll be charged a fee for that coverage. Overdraft protection is available for emergencies – and that’s how you should think of it. Unfortunately, that $35 dinner will now cost you approximately $25 more (depending on your financial institution’s overdraft fee). And, if other charges clear your account at the same time, an overdraft fee will be charged for each. These charges can add up.