My son uses his debit card to pay for most everything and doesn’t write checks. Yet, he kept getting overdraft notices from the bank.
What we soon discovered was that the bank was letting charges go through even though he didn’t have enough money in his account to cover the purchase. And, of course, they charged him a hefty fee each time. His $5.00 meal at Burger King was costing him $33.00!
He assumed that if he didn’t have money in his account, the charge would not go through – after all – it was a debit card!
Most banks and credit unions automatically enroll your checking account in an overdraft protection program. The financial institution then lets you spend more money than you actually have in your account by loaning you the money and then charging you an overdraft fee. The banks claim the program is a customer service. In reality, the banks are acting as loan sharks – giving you a short-term loan to cover the overdraft at sky high interest rates!!!
It turns out this is what was going on with my son’s account. Once he canceled the overdraft protection program – no more overdraft fees!
