Overdraft Credit

Overdraft Credit

An overdraft line of credit is a good alternative to payday loans.

It is a form of overdraft protection.

Unlike bounced check protection, however, overdraft credit is safer and cheaper

In order to obtain this credit, you must:

  • meet certain creditworthiness criteria
  • enter into a written agreement with your bank

Under the written agreement:

  • bank is obligated to pay overdraft (unless fraud is suspected)
  • bank may be liable for failure to pay
  • interest based on amount of overdraft
  • you may pay overdraft in installments

Unlike bounced check protection, overdraft credit falls under Truth in Lending regulations so the bank is required to disclose all fees, APR, etc. before the agreement is signed.

Compared to bounced check protection (which is expensive and carries many risks), overdraft credit is a decent payday loan alternative.

Recent Posts:

Random Posts:

GD Star Rating
a WordPress rating system