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What is overdraft protection?

View More Banking QuestionsPosted 3/30/10 at 6:17am
What does overdraft protection mean?
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Overdraft protection is a checking account feature that essentially gives a person a line of credit in order to write checks or make payments that exceed their account balance. Instead of being charged $25 for a bounced check, overdraft protection hands out a sort of instant loan.

The interest is incredibly high when you go into overdraft but rarely costs as much as bouncing a check would.
Posted 4/3/10 at 12:46pmWas this answer helpful?   Yes / No
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