question on financial literacy

Question Description

Lucy and her mom chose not to have overdraft protection on Lucy’s checking account. What is your opinion about this decision? What factors would have to change for you to have a different opinion about choosing overdraft protection on a checking account?

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Final Answer

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Definition: a line of credit that banks offer to their customers to cover their overdrafts. Overdraft protection kicks in when a customer writes a check for more than the amount in their account.

From the case above regarding Lucy and her mother,in my opinion, it was not a wise decision to do so because It covers transactions that exceed the balance in your checking account, giving you peace of mind and eliminating the inconvenience and potential embarrassment of a rejected check, check card or ATM transaction..Although it comes with a price but it is wise to have it.

Factors to change for them to consider applying for it:

1.reduction in interest

2. Doing a way with the application fee

3.Reduce transfer fees

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Major J. (36)

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