ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It’s the bank’s fault when you overdraft your account because they should know how much you have in your account. Overdrafting your account is a result of sloppy, lazy money habits.

Detailed explanation-2: -The term “protection” is actually a misnomer, because when you opt in for the service, you are actually authorizing the bank to let you overdraw your account by using an ATM or debit card and then charge you penalties that can amount to $30 or more each time you overdraw your account.

Detailed explanation-3: -If your balance goes into overdraft, the funds are transferred automatically to your checking account to cover the difference. In other cases, the bank won’t return the transaction and process it, which means you’ll be charged fees until you deposit money to cover the difference.

Detailed explanation-4: -When you write a check the bank takes money from your account and pays it to the person who submits the check. 2. The bank keeps track of how much money you have left in your account and sends you a statement each month.

Detailed explanation-5: -Knowing ways to avoid each pitfall can help you stick to a budget. One main reason people abandon budgets is simply because it’s difficult and can feel overwhelming. According to the Consumer Financial Protection Bureau, half of American consumers say they don’t even like to think about money.