Question 13 • GA-GSE Personal Finance and Economics
Alex has not been keeping his banking records up to date. On his latest bank statement, he found that he had been charged an overdraft fee for writing a bad check. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?
Answer
A
The bank will close the merchant's account.
B
The merchant who received his check will be charged an overdraft fee.
C
The bank will cancel his debit card.
D
The merchant who received his check will expect repayment and a penalty fee.
Explanation
When a check bounces because there is not enough money in the account, the merchant does not receive the payment. The merchant may ask Alex to repay the amount and may also charge a returned-check penalty fee. Therefore, the possible consequence is that the merchant who received his check will expect repayment and a penalty fee.
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