ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Overdraft line of credit: This feature links your protected account to an established line of credit. You borrow against that line of credit to cover the shortfall when you overdraw. In addition to a transfer fee, you’ll pay interest on the borrowed balance until you pay it off.

Detailed explanation-2: -Key Takeaways. Both overdraft protection and a credit card are personal lines of credit-loaning you funds which you must repay with interest. Overdraft protection is usually attached to a checking account, ensuring that checks don’t get returned for insufficient funds.

Detailed explanation-3: -Overdraft Protection covers all transaction types – including, for example, ATM and debit card transactions, checks, Bill Pay, and recurring electronic payments.

Detailed explanation-4: -The cons of overdraft protection Some banks assess a fee per overdraft protection transfer, which can result in multiple fees in a single day. Transactions may be declined if you don’t have sufficient funds in your linked savings account.