Consumers Increasingly Use Overdraft Loans as Expensive Credit
A nationwide survey shows that low-income people, single people, and many people of color are increasingly turning to borrowing money from financial institutions by over-drawing their checking accounts, racking up interest rates that can exceed 1,000 percent. A telephone survey of 3,310 households done for the Center for Responsible Lending shows that a mere 16 percent of bank customers account for nearly three-quarters of all overdraft loans. In other words, these people are effectively turning to overdraft loans (or "courtesy overdraft protection," as it's often called) as a line-of-credit