Before you accept your bank's invitation to opt-in for overdraft protection, recognize how that invitation may affect your money.
According to a study conducted by Moebs $ervices, an economic research firm based in Illinois, overdraft fees provided more than $37 billion in revenue to banks in 2009. While this coverage was previously automatic, consumers must now choose to enroll in overdraft protection.
There are alternative backup strategies that consumers can use if they have insufficient funds, such as linking their checking account to their savings account or a credit card.
"Everybody needs a line of defense, but your lowest-cost line of defense will be to have your bank link your checking account to your savings account," McBride says.
Some banks still charge $10 each time a savings account must cover an overdrawn checking account, McBride says. However, this type of overdraft protection also can be found free of charge.
"When a member joins the credit union, we default to having their savings account automatically cover overdrafts, and without a transfer fee," Berquist says.