Overdraft is another way banks win and you lose

Financial Post | Business

Embarrassment is a lot less expensive and easier to handle than an overdraft fee

Overdraft limits are rising south of the border but, in Canada, the dependence on this expensive source of credit is a closely guarded secret.

One thing is for sure. Our banks are making lots of money from service charges, and overdraft “protection” is one of the products designed to separate us from our money.

A study from Lake Bluff, Illinois-based Moebs Services found that being in an overdraft position made a comeback in 2012 after the U.S. government passed legislation back in 2010 that made it more difficult for banks to offer the service to consumers.

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In 2008, overdraft revenue at U.S. financial institutions climbed to US$35.4-billion, aided by rules that simply allowed your bank to put you into hock if you spent more than you had as opposed to just rejecting the transaction.

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