By: Joe Gillen
Overdraft programs have been scrutinized as of late for the fees they impose on consumers. However, a recent article highlights the benefits of credit unions' and banks' overdraft privilege programs in helping Generation Y navigate their finances and learn how to manage their money.
Many college students and young professionals live on a limited income, and may lack the resources and financial education to effectively manage their money and meet all of their needs. However, overdraft programs can provide a safety net for young consumers who may make financial missteps. At the same time, they can learn more about how to better organize their finances and allocate their resources, according to the Credit Union Times.
Analysts say that many banks and credit unions offer financial literacy tools to young adults, ranging from basic information about checking, saving and investment accounts, to navigating the mortgage process. Most institutions also retain financial advisors that can help young adults compare different bank and credit union products to make the most informed decision for their futures. These financial literacy tools can be beneficial in helping young adults build strong financial foundation. Overdraft programs can give young adults the freedom they need to make missteps without facing serious and costly financial ramifications, the CU Times argues.
"Mistakes are inevitable in life, and without a safety net in place, we'd all be in trouble," said CU Times columnist Natasha Chilingerian. "But the goal in making mistakes should be to learn from them, not repeat them. By offering educational resources and continuing to do what they do best - providing low interest rates and top-notch customer service that demonstrates a true sense of caring - CUs might help lead Gen Y on a path of good financial choices."