If you have irregular income, you may want to purchase overdraft protection, a bank service that enables you to write checks for more money than you have in your account. If you overdraw your checking account, the bank will lend you money—or transfer money from your savings account—to cover the check. Some banks link your credit card account to overdraft protection; the overdraft amount is charged to your credit card.
Although overdraft protection is a convenient way to avoid costly fees for bounced or returned checks, the service is not free. There is usually a “transaction fee” as well as interest if the money is a loan. Pay the balance off as soon as you can. If the money is taken from your savings account, transfer it back again when you get your next paycheck.
Overdraft protection is usually much less expensive than a payday loan.
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