Atlanta Bankruptcy Attorneys Cautious of Overdraft Protection Pressure By Banks
Banks are trying to sell consumers on a deal that really is too good to be true, according to Atlanta bankruptcy attorneys.
This summer, a new law will go into effect requiring customers to "opt in" to overdraft protection plans offered by banks (previously many banks enrolled customers automatically - often without telling them). Problem is, banks count on overdraft protection to rake in more than $20 billion in fees annually. To try to recoup some money, banks are sending out millions of letters trying to convince - and in some cases, threaten - customers to sign up.
What is overdraft protection? It's a feature that authorizes banks to "loan" you money when you overdraw on your account with a debit card - for a fee, of course. Here's why it might be a feature you can't afford, especially if you're already dealing with debt.
Let's say you pay for $30 worth of groceries with your debit card, but you don't realize you have just $25 in the bank. With overdraft protection, your transaction goes through because, unbeknownst to you, your bank just chipped in the extra $5. It sounds convenient, until you get the bill - typically $35, $40 or more. That's more than the groceries you just bought!
Is it really worth $50 to not have to dig through your pockets for some cash - or, if you have to, a credit card? Banks will try to convince you that it is. According to the New York Times, some banks are even sending out letters that warn customers their debit cards might not work as well if they don't sign up for overdraft protection. Well, I say that debit cards will work even better, since you won't have to risk being slapped with a fee.
Even if you opt out of overdraft protection, overdrawing on your account can be a major problem - whether it causes you to bounce checks, or develop a habit of putting anything and everything on a credit card. If you never seem to have enough in your bank account, debt is the likely culprit. A bankruptcy plan can help you fight back against debt by providing an affordable payment plan and legal protection against lenders and creditors.
With less debt, you'll owe less interest, meaning you'll get to keep more of your paycheck in the future. And that, in turn, means less chance of overdrawing. Find out if bankruptcy is the best solution for you when you try a free one-on-one debt analysis with an Atlanta bankruptcy attorney.