Banks offer to almost all account holders something known as overdraft protection. People who do not take advantage of checkbook registers or checkbook calculators find that they frequently have no idea the account balance. Therefore when they make a purchase with the check card they may run into negative territory. Overdraft protection permits such transactions to go through anyway.
Instead, the bank temporarily lends money to the account holder which is passed onto the merchant. This is done without acknowledgement of the account holder. The result is that he or she is not even aware that he or her account has gone negative. In fact, many banks used to enroll their customers in overdraft protection programs by default without notification. Although the bank customer gets the benefit of never having a transaction denied, he or she must pay a fee each time overdraft protection is invoked.
Both regular customers as well as Congress was angry that this was happening. To them it was a sneaky way of making money off the customers, especially when the overdraft fee was $35 and the offending transaction was perhaps only a few dollars.
However as of 2010, new regulations have abolished the automatic enrollment of customers into overdraft protection. Now banks must seek explicit consent of their customers to enroll them in these programs. The federal program has gone further by ordering certain banks to pay back all these fees to their customers. Banks are appealing the decision of course.
The abolishing of automatic overdraft protection means customers have to watch more carefully how they spend their money. One way is to monitor the checkbook register or transaction register closely.
However, a more modern method of tracking finances is checkbook software. Although it is not as portable, it can be used to record transactions with greater detail. Past records are quickly retrieved with various search criteria, and transactions can be sorted in different ways.
Specialty information on check transaction register are free for your perusal. Specialty resources on business checkbooks are free for your use.
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