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Just saw something interesting in my inbox. From INGDirect:

In a few weeks we're going to make a change to your Electric Orange Overdraft Line of Credit. On May 16, 2011, the variable Annual Percentage Rate (APR) will change from 7.25% APR to 11.25% APR and the Margin will move from 4% to 8%. The new rate will become effective on your overdraft balance the first time you access your Overdraft Line after May 15, 2011.

I've never paid any attention to that (didn't really know it existed), but I'm thinking "Man, this kind of sucks." But then:

After this rate increase, your Electric Orange Overdraft Line of Credit is still a great option. See how ING DIRECT's Overdraft Line of Credit stacks up:


                       ING DIRECT       National Avg
Overdraft Charge Overdraft Fee
You Pay $0.31 $30.00

You'll pay just 31 cents if you borrow $100 for a ten day period.


Who would have thought? No minimum fee, just a straight APR on a daily basis.

Of course, for those who could benefit most from an ultra-low fee payday loan, this won't work for obvious reasons. But for people with normal checking, this beats the hell out of even the new-and-improved overdraft protection from most banks.

I'm irrationally tempted to borrow $1000, and figure out if there is something I can do with it that will make me more than $3.10 in 10 days.

v/r
Tom
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Of course, for those who could benefit most from an ultra-low fee payday loan, this won't work for obvious reasons. But for people with normal checking, this beats the hell out of even the new-and-improved overdraft protection from most banks.

Even at a traditional bank, there are choices other than the overpriced "convenient overdraft credit line."
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Jacketfan,

You wrote, Who would have thought? No minimum fee, just a straight APR on a daily basis.

What was old is new again...

My old Savings of America account (bought by the WaMu ages ago) 20 years ago did that. They didn't charge a thing for overdrafting checking - they just pulled funds from my linked credit card in $100 increments. Of course the credit card rates weren't great, but if you paid it back quickly the costs were minimal. Of course that's one of the ways they got you sucked into carrying a balance on that credit card...

BTW, my credit union checking account has had a similar arrangement for the past 15 years; but it's tied to an $8K line of credit I've only ever used once ... and even that was only for a day.

- Joel
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