Greensboro, NC -- It's called overdraft protection. But could it be re-named overdraft rip-off? According to a study from the Consumer Financial Protection Bureau, you may pay more having overdraft protection on your account than if you don't!
Let's start from the beginning. Overdraft protection is supposed keep you from bouncing checks by advancing you money. You might pay a little for the advance, but you don't have to worry about the returned check fees.
But the CFPB looked at the overdrafts and found people who opted for overdraft protection actually paid $347 more in fees than those who opted to go without protection but still overdrafted.
So what can you do? Ask for information from your bank. Make sure you know how overdrawn you have to be to trigger a fee. For some banks it's $5. For others it's a penny. Also find out the the percent you pay on the advance. You can also compare banks. It never hurts to shop around.