The “Over” is Over

June 21, 2007 - 3:08 PM by

One of the more surprising surprises for Westerners who move to Israel is the overdraft system.

Banks allow (and some might argue “encourage”) customers to overdraw GENEROUSLY on accounts because of ensuing interest accrual and the ultimate necessity of taking out a loan to cover the overdraft. Read: tidy surplus earnings for the bank. How deep you’re allowed to get in over your head i.e. your overdraw limit depends upon your net worth & assets; all too often people discover their limits when the ATM machine swallows the card.

But the system is precarious and tenuous because it’s borrowing against borrowed $ and without serious belt tightening, it can be hecka dangerous for an already-in-debt client. Not to mention a waste of money what with the bank interest rates, fees…

Confused yet? Think of it as second mortgages for the masses. Literally. Almost anybody can get in over his/her proverbial head.

That is, until next month. On July 1, Israel’s bank system will FINALLY institute an overdraft reform measure meaning that if you’re overdrawn and you haven’t worked out some sort of approved cap or re-payment plan with your bank, your checks are gonna go rubber. As will automatic payments to utilities and other companies, etc.

It’s designed to reign in spending and bank greediness charges..

In doubt or think you might be on the edge?

Get thineself into your financial institution and have a little one on one with the person who handles your account. Amen

Tags: • Category: A New Reality, Business, Israeliness, Life 

Comments

2 Comments on The “Over” is Over

  1. Nicole on Thu, Jun 21st 2007 3:48 PM

    2. I thought they implemented it already in July last yea, no?

  2. Stephanie on Thu, Jun 21st 2007 4:23 PM

    3. Correct you are, Nicole…HOWEVER, the banks delayed the full implementation last year because they worried about heaps of returned checks and also a repeal of unilateral bank fees incurred on top of interest rates (i.e. their revenues will be hurt)…they’re trying to delay the implementation again over the same issues but it 99% isn’t going to fly this time…slf

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