Like an essay due date, overdraft fees have a way of creeping up on you. But, unlike a late paper, there’s no way to get extra credit to erase those pesky fees. Young adults with newly minted bank accounts might not realize the rules and fees that go along with the privilege. A quick lesson in avoiding those fees can help save students from a completely avoidable cost.
Banks charge a fee for overdraft protection. Anyone who’s endured the embarrassment of a declined debit card on a date will tell you that overdraft protection can really come in handy: it’ll cover the cost even if the account is empty.
Overdraft protection, of course, doesn’t come for free. Banks charge a fee each and every time a transaction is made in which the protection is activated. Depending on what the bank charges, that means a $2 pack of gum can cost up to $37 if your account balance is too low. We cover this topic in Banzai Teen:
When teens understand overdraft protection and overdraft fees for what they really are, they can make better-informed decisions. Whether keeping the protection or removing the safety net, knowledge is power–and money in the bank.