GOAL: You will experience clearing a check with and without overdraft protection (ODP) when the balance on the checking account is insufficient.

Scenario A:

  1. There is a rent bill due in three days from Vista Vue for $650.
  2. The Participant has $600 in their checking account and Checking Account Option #1 (no ODP).
  3. Their next paycheck is in five days.
  4. Their credit card balance is $200.

Here is what will happen:

  1. Vista Vue Landlord issues a rent bill for $650 to the Participant.
  2. The Participant checks his/her account balance.
  3. The Participant gives a check for $650 to the Landlord to make an on-time payment without waiting for payday.
  4. The Landlord goes to the Bank Teller to deposit the check.
  5. The Teller finds there is not enough money in the account and issues an NSF (Non-sufficient funds) to the Participant and a Returned Check fee to the Landlord.
  6. The Landlord passes the Returned Check Fee to the Participant.
  7. How much did it cost the participant to bounce the check? Total $ ____________ and Total Points __________

Or this could happen:

  1. If the payment is not received on time the payment is considered late.
  2. The Landlord gives the Participant a Late Fee and an Initial Late Fee Penalty. For each subsequent day, the Landlord issues a Per Diem Fee and a Outstanding Balance Penalty.
  3. How much did it cost the participant because the payment is late? Total $ ____________ and Total Points __________

Scenario B:

  1. The only difference is that the Participant has chosen Option #2 for the checking account. The Teller charges the Participant an ODP Subscription fee and hands them the coupon to show this coverage.
  2. Vista Vue Landlord issues a rent bill for $650 to the Participant.
  3. The Participant checks his/her account balance.
  4. The Participant gives a check for $650 to the Landlord to make an on time payment without waiting for payday.
  5. The Landlord goes to the Bank Teller to deposit the check.
  6. The Teller finds there is not enough money in the account, but sees the Participant has ODP.
  7. The Teller works with the Credit Card Rep to get a Cash Advance.
  8. The Credit Card Rep also gives the Participant the Cash Advance charge to represent the amount that will appear on the credit card balance.
  9. The Teller gives the Landlord the Payment and gives the Participant the ODP Per Use Fee.
  10. The payment is considered on-time.
  11. How much did it cost the participant to get this check cleared using Checking Account Option #2? Total $ ____________ and Total Points _____

Scenario C:

What would happen if the participant had Account Option #3 or 4, which have minimum balance requirements?

FYI: A one-time courtesy late fee waiver can be used to get back the initial late fee and 75 points of the initial Late Penalty. This can only be requested once the outstanding balance is brought back to zero. (Only one courtesy late fee waiver will be processed per student for the entire simulation.)

You can use the lessons learned from this activity to make your selection for the Checking Account type on Student Home>Vendor Selections. Remember that you must finish making vendor selections for ALL of the tabs by 9 p.m. on February 9th to begin the simulation to be eligible for prizing.

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