Imagine you drive 15 miles to work every morning, to a job that demands you be on time, every time. You have two freeway options: one with a speed limit that remains constant at 65 mph, or another with a varying speed limit that can be 25 mph one day, 80 mph the next, or anywhere in between. Which road is more dependable? Which road would you choose to take?
That’s how I describe the difference between a fully disclosed, transparent overdraft program with fixed limits, versus an overdraft program with variable limits, set for each account holder by a matrix of data. The former, a steady and reliable option that gets you where you need to be; and the latter, an unpredictable route that can end up leaving you frustrated and in a lurch.
There’s a lot of spin surrounding matrix-based overdraft programs, and it seems pretty convincing on the surface. But what’s hiding behind these “services,” and do these models actually provide a disservice?
What is your definition of a “managed” overdraft program?
I’ve heard both matrix-based and fully disclosed overdraft programs described as “managed.” Which defines that term better?
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