Question: We’re a young couple, and we’ve just opened our first checking account. The banker told us about a helpful service called “automatic overdraft protection.” He said if we ever overdraw our checking account, the automatic overdraft covers the deficiency. This sees like a good idea, but I know that it must have some pitfalls. Can you help us understand better? Response: BEWARE OF AUTOMATIC OVERDRAFTS! Why? Because they present two distinct problems: (1) They can encourage you not to balance your checking account because you know that you have overdraft “protection.” (2) An automatic overdraft is also an automatic loan. It comes out of a credit account, and you’re charged interest as well as a fee for using it. In my opinion, the automatic overdraft is one of the worst services in the banking industry and certainly one of the quickest sources of debt for undisciplined folks who don’t balance their checkbooks. A proverb says it well: “The naive proceed and pay the penalty” (Proverbs 27:12b).