Did I do the right thing for getting this to keep from overdraft fees?

Question

I'm still young and new at all this but the bank put an overdraft protection on my account. I qualified and I guess it's up to $3,000 in protection.

Anyways, if I overdraft by any amount of $ even if it's just $1....they take $200 from the credit line and put it into my account. And I need to pay this off ASAP the whole thing since it has a high interest rate, she didn't tell me what date I needed to but I figured ASAP is good enough. But if not then they start to take $25 each day from my account.

Did I do a smart or stupid thing?

Additional Details

I rarely ever overdraft, I'll cancel.

I feel so stupid =\

Answer 1

Basically what you get is a credit line, if you don't pay that credit line you could get more fees and she is right your interest is probably pretty high. Do you have a problem with over drafting? If not then I would call and cancel that as it could be more of a problem then having it. If you do tend to overdraft then keep it as they shouldn't charge you overdraft fees for having it. You need to find out if they can still charge you overdraft fees even though you have the overdraft protection because if they can then it's pretty useless having that and cancel it as they are just trying to make money off of you.

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Answer 2

Agreeing to the overdraft protection wasn't wrong. Using it could be a very bad idea.

The reasons I'm saying that using it would be a bad idea are because
- If you go over by even $1 they'll take $200 from the credit line - That seems like a tricky way for the bank to almost force a loan on you that you don;t need.
- Not paying off means you get charged $25 each day - That is an insanely high amount to charge you.

I would suggest you close the line of credit but first makes sure they won't charge you a fee to close it. Read all any paperwork that the bank gave you regarding this overdraft protection.

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