Payday loan interest rates are nothing compared your banks overdraft charges.

If you us  a debit card your bank has probably made an offer recently they don’t want you to refuse. The banks want you to agree to continue with its standard overdraft practices.

The banks are not doing this just to be nice and keep you informed. After many years of complaints from consumers, the Federal Reserve finally came to the decision that some consumers were harmed because banks were routinely allowing purchases or ATM withdrawals that pushed customers into debt by allowing an unauthorized overdraft, and then charging the user for it.

Banks realized that there was big money to be made by blurring the line between debit and credit cards. Debit cards allow you to make payments with your own money, rather than borrowing from the banks.

Now the Federal Reserve has decided consumers are  entitled to know when they are borrowing. Many debit cards used for everyday purchases or withdrawals can incur  overdraft charges that could cost you $35 or more.

If you’re careful type, or quite sure you will only use the overdraft feature once in a while for unexpected expenses, then the overdraft charges may not seem to be such a big deal. These rates being charged by banks are far in excess of rates charged by payday loan companies.
Debit cards are a great way to avoid spending money you don’t have. If you want credit, get a credit card. If you want a loan you should at least be told up front what the charges are.

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Filed under: Payday Loan Rates

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