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Pre-Approved For Bad Financial Habits

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Today I got a notice from a bank that I have been pre-approved to sign up for overdraft protection. This was not a small amount either as in many ways it’s like starting fresh on a new credit card. Now the selling point of course is that sometimes in life thigs happen and you don’t want like the embarrassment of trying to pay for something just to not have enough funds. I have actually only seen this happen once before to someone who wrote me a cheque for some work that was done. The funny thing was he would often brag about how much money he had and all the business opportunities he has around the world to make more money. However, I had to tell him in a professional way that his cheque bounced due to a lack of funds. I suppose you can say overdraft protection is meant to avoid things like that.

I was thinking though that having an overdraft protection can be in many ways encourage you to be disengaged with your finances where it’s okay to draw out more money than you have. In that sense it’s almost like the financial institution is encouraging you to have financial mishaps. Just like using a credit card I don’t think you should ever spend more than you actually have in bank regardless of how much credit you have.

Would it not be better to take on the embarrassment instead so that you are less likely to do it again? All those additional fees you would probably have to pay every time you withdraw too much money can probably add up too.

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