Junk Fees
I'm not sure how all the banks are handling this but here is what our bank is doing..
In years prior if you overdrafted, at the end of the night a $35 fee (per item) was charged to your bank account. If you overdrafted through the day at a POS, there was an assumption it would be covered before end of day, and the sale was let through.
Now, all POS are declined if the account balance is $0, regardless pending deposits.
1/
Instead, the bank now offers an overdraft line of credit at 18% interest. There is a set $ amount, but you can move money over to cover overdrafts.
Obviously, the goal is to pay it off immediately. But there may be cases when someone can't do that.
I can't help but wonder how much more money the banks will make off this interest than they did off the overdraft fees themselves.
Of course it is a way to get around Pres. Biden's administration.
2/
I disagree. My CU has had overdraft LoCs for decades now and in the times that I've used it, it's been way cheaper than bank overdraft fees. I've had to carry a few hundred dollars for a week or two and the daily interest accrued was < $10. As long as you don't use it as a revolving line of credit, it's a plus in my book.