Overdraft+Protection

//**__Overdraft Protection__**//- If you do not have sufficient funds, then your overdraft protection will cover it. You have to pay a montly fee for it.

-__From banking.about.com__: If you have overdraft protection on your account, the bank will cover the check (or pay the money) for you. Let’s assume that you write a check for $100 and you don’t have $100 in the bank. The bank might allow the check to clear, and simply expect that you pay back the $100 later. Of course, there are limits. You’ll find different limits on the dollar amount that an overdraft protection plan will cover. Also, you may have your privileges revoked if you frequently write checks in excess of your available balance.

-__From financialplan.about.com__: Overdraft protection is a good safety net to protect you, but if you're not careful it can become a crutch that encourages irresponsible financial behavior. Don't have enough money in your checking account to pay for that leather coat that's on sale for only one day? No worries. Just write a check and let your overdraft protection cover it. It's a dangerous road to go down. Traditional overdraft protection is a line of credit (loan) provided by your bank that automatically protects you against checks or ATM withdrawals that exceed your bank balance. If you sign up for standard overdraft protection, your overdrawn check will be paid by the bank, with no charges for insufficient funds. You agree in advance to have the overdrawn amount deducted from your savings account, added to your line of credit, or charged to your credit card. You know the fees and interest charges ahead of time.

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-**//__Test Question__//**: Overdraft protection is a bank service provided for free. True or False?

~Matt V.