What is overdraft coverage?

Overdraft covers are the money that is provided to complete the transaction when the person goes over. In some cases, these funds are lent by individuals by its financial institutions. In other cases, these funds may be drawn from other accounts that a person has. Overdraft coverage is controversial for many reasons, including the total costs of such services and insufficient emphasis on financial responsibility. Overdraft coverage, also known as overdraft protection, allows the person to continue the transaction, although it has insufficient means. For example, consider that the individual goes to the store and is trying to use his debit card to buy food worth $ 45 (USD), but only has $ 30 on his account. Without any kind of help, this transaction could not be completed and it would have to reduce the costs of the law. If overdraft coverage is provided, the person is generally obliged to repay the amount that has been borrowed, and another amount that is usually referred to as an overdraft feet. Some financial institutions charge additional fees for pumping if the debt does not match within a certain number of days.

fees that are associated with overdraft covers are causing most of the debate on this type of service. The amount provided by the financial institution to complete the transaction is often low. However, fees can be several times higher than this amount, making it an expensive means of business. This led to legislation in the US in 2010, which prohibits financial institutions from automatic expansion of this type of service for certain transactions. Instead, people who would like this type of coverage must apply before receiving it.

Sometimes coverage of pumping is provided from the person's own financial resources. For example, if a person has a person and a savings account, he may agree to have funds from his savings account if he / she is handed over from his / her check account. For this withThe Lužba may be a fee, but if it exists, it tends to be significantly lower than the fee for coverage provided by the bank. The protection of overdrafts of this type is also controversial because many claim that consumers must be financially responsible and that excessive expenses should be discouraged.