Overdraft Protection.  If you have it, you have given your bank authorization to turn one honest mistake into a snowball of multiple NSF charges instead of hopefully just one for the one honest mistake.  I figured this out years ago, and was sure I no longer had this “service” on my account.  I was sure, because I said “No thank you” very clearly when asked if I wanted it!  You have to do that if you don’t want it – they put it on accounts automatically unless you request NOT to have it.  They put it on mine even though I DID make that request, and also on both of my sons’ accounts – one that was just recently opened, and they didn’t even mention it when we opened it.  I corrected that this morning on all three accounts.  Do you know whether or not you have this little trick on your account?  You might be surprised – check with your bank.

Ok, now who wants to hear what stupid thing I did to cause me to discover this?  The biggest bill I pay every month, I always set up to pay online on the due date – August 11 this time.  That gives me plenty of time to make sure the money gets deposited to cover it.  Well, apparently I forgot to check the pay date box, and so it just paid on the next business day – or tried to.  The money wasn’t in my account yet and FORTUNATELY my “Overdraft Protection” (which I didn’t know I had!) was for a lesser amount than the payment, so the bank will return it unpaid and charge me ONE $28 NSF fee.  I can recover from that, set the payment up again for the correct date, and still have money in my account to pay the rest of my bills as they come in between now and then.  If the “Overdraft Protection” (WHICH I DIDN’T KNOW I HAD!!!) was for a large enough amount, they would have paid the large payment, still charged me the $28 fee and then each and every item that came in after that would have also been charged a $28 fee because they would have overdrawn my account to pay the large payment.

Trust me.  You do not want your bank to pay anything you do not have the money in your account(s) to pay.

This concludes today’s lesson in personal money management – something, by the way, that I’m usually very good at – ask anyone who knows me and has seen my spreadsheets.  But WOWZERS – one session of paying bills while sleepy and overwhelmed can really do you in!

Evidently, I’m not the only one annoyed by this practice.  I found this Forbes article on the subject: http://www.forbes.com/sites/moneybuilder/2009/10/30/pending-legislation-might-limit-overdraft-fees/