I take it nobody has any advice on this eh?

If it's free, take the protection. If they are charging (and US Bank probably is just based on their reputation in the industry) you would be better off without it.

They are not charging for it, but it still shows up as a line of credit on my credit report, and its kind of pointless to have sitting there, I have a credit card with 0% interest, so if I needed money I didn't have, I would use it lol...

I know this is old but may be someone will ask again. Most all banks and credit unions alike offer overdraft protection, some call it a courtesy overdraft protection. It sounds nice, like they are really helping you out but in reality they are helping themselves out.

It works like this:

Many customers like the concept of Courtesy Overdraft Protection. From their perspective, they’ve written a check that they don’t have funds to cover. The bank or credit union pays the check and assesses a “small” convenience fee. The customer’s creditor is none the wiser. Their bill has been paid and they don’t assess a separate fee to the customer for writing a bad check. In addition, there is no black mark on the customer’s credit report.

The banks or credit unions like the Courtesy Overdraft programs as well. From the financial institution’s perspective, they are making a number of low-risk, short-term loans and getting fee income each time they do it. Customers enrolled in these programs may be more likely to overdraft their accounts more frequently increasing the institution’s fee income even further.

Sounds awesome, right!?

If you do the math these short-term loans come at a very high price. For example, say you write a $500 check you can’t cover. The bank or credit union covers the check for you and charges a $35 fee. A week later, you get your paycheck and the loan is paid off. For the privilege of a $500 loan for one week, you pay $35. This equates to an interest rate of over 400%! Who in their right mind would take out a loan with a 400% interest rate? No one, that’s who. But this is one way banks continue to have record profits each year. Sounds more like a Payday Loan if you ask me.

There is a better way. Check with your financial institution to see if you can have overdraft protection from your savings account. That way, if you write a check without sufficient funds in your checking account, the money will come from your savings account instead. You may even be able to set up overdraft protection from your credit card. Yes, this would technically be a loan but it’s at a far lower interest rate that with the Courtesy Overdraft programs.

Well, I closed those overdraft protection accounts a long time ago already, I didn't have a need for them, and I wanted them off my credit report...they did make them seem very convenient though, I forgot what it broke down to, but it seemed like you paid $0.16 a day for every $100.00 over drafted...

Wow that really adds up!

I mentioned this in another thread to a person who had overdrawn his checking account recently. Instead of opening yet another checking account, maybe consider a prepaid debit card for your spending money. That way, you never overdraw your account again since the card just won't authorize your purchase if it's more than what you have on your card.

Then, leave your existing account in tact for your household bills. I've been doing this for my own budgeting needs for the last couple months and it is working for me. It's keeping me real honest about the money I'm spending eating out, on groceries, gasoline, etc.

Let me know how it works for you!

Best,
Kim

Bank with Bank Of America. They offer free overdraft protection to all member. They also make it so you cant make a purchase with a debit card if there are insufient funds on your card.

The Bank of America "free" overdraft protection is just another line of credit. I agree with User Name, a savings account is best. If you are someone that does have trouble keeping your account in the positive then the pre loaded debit card is a great option. Also, many banks are really pumping up their e-services. A popular new technology is to get e-alerts such as low balance alerts or having your bank text you your balance every morning. The credit union I am with does this for free. But, User Name is right, the bank is the only one who is "helped" by having a line of credit attached for overdraft protection.

As a bank branch manager I can't tell you how many times issues are raised for even my best clients regarding ods and their subsequent fees. For most people ods are inevitable. It happens to the best of us. Think about it this way what if the one time you od your account is for your taxes or your mortgage. If you don't have OD protection you'll be in a world of hurt.

ohh, that really adds up!