Overdraft charges represent one of the largest segments of the short-term unsecured credit market. Understand your bank, and get to know their fee policies. Make sure they are military friendly.
Before they were famous, many truly influential men and women started by serving their country in the US military or grew up in military families.

A Financial Chill: Bank Overdrafts on Military Bases

The Military Lending Act succeeded in outlawing payday lenders from approaching military personnel and their families near military bases. And with good reason. Not only are payday loans deadly to your military family finances, the DoD expressed real concerns about the negative impact of payday lending on troop readiness. Financial literacy is essential to military readiness; financial disruptions, often at the core of military family distress, can easily make you lose focus on your military mission.

The bottom line: avoid payday loans. If you are military and in of a short term (or longer term) loan, you have options: reputable financial institutions that specialize in military loans such as Pioneer Loans, and even grant loans with bad credit offering interest rates at fair market value.
But it also pays to be aware of even the small-ticket charges that drain money from your military pay. One such financial practice is all too common on military bases, and it often goes unnoticed: on-base financial institutions that charge exorbitant overdraft fees.


Overdraft charges are commonly referred to as "bounced check or NSF fees." Overdrafts on your debit card purchases and ATM withdrawals are particularly harmful because they can quickly become exponential. Overdraft fees, often triggered by one small transaction, often take you completely by surprise...but by the time you find out about it, the snowball effect may already be rolling.

A single overdraft fee charged on a typical debit card purchase is often vastly disproportionate to the amount of the overdraft itself. For example, you might be overdrawn by under $5...but your overdraft fee may be $35.
The impact of overdraft fees can add up quickly...and not in your favor. Imagine a soldier buying a cup of coffee and causing an overdraft of just $2 in his checking account. Once an overdraft fee enters your debit column, if you unknowingly continue using your checking account, more overdraft fees will accrue for each overdrawn transaction. The result: that $2 cup of coffee could easily cost you $100 or more.


Overdraft charges represent one of the largest segments of the short-term unsecured credit market. Overdraft fees are larger than credit card over-the-limit penalties, even bigger than payday loans, bringing in $34.7 billion in revenue for banks and credit unions in 2008, compared with $7.3 billion for payday lenders.

Understand your bank, and get to know their fee policies. Make sure they are military friendly. Be responsible and display good money management strategies. Both base commanders and military families need to be aware of and educated about on-base overdraft policies and other financial policies of on-base banks and choose to bank at lending institutions that make them truly supportive of the military.

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