Several months ago I received a letter from my bank letting me know that they were no longer offering overdraft protection to their customers unless they "opted in" for the coverage. In other words, if I wanted the bank to cover accidental overdrafts, I would need to log in to a specific web site URL and express my desire to remain in the program.

Although this might seem like a simple decision, I considered it for several days before making my choice. And if you have the option at your bank, I urge you to give it more than a few seconds of thought because it could drastically impact your banking experience.

I'm ashamed to admit it, but I'm sure I'm not alone in having accidentally overdrafted my checking account a couple of times. Since a significant portion of my income is paid through PayPal, for example, I have to be careful about knowing when and if I've transferred money. On occasion the transfer has taken longer than normal, and I've had to check the bank to make sure all my expenses were covered.

It happens. And overdraft protection is an easy way to ensure checks are never denied when I make a critical accounting error. The last thing I want is to bounce a check because I was a couple dollars short in my checking account.

The main problem with overdraft protection is that the bank isn't giving you a free pass. At my bank, overdraft fees cost $35 per occurrence, and a single bounced check could theoretically result in several fees since the bank tends to pay the largest expense first. It can become a domino chain if you aren't careful.

Of course, for most responsible consumers, this isn't an issue. You use it once every few years when you make a mistake, and the rest of the time it doesn't matter. What's $35 when you're avoiding the hassles of a bounced check or a declined debit card?

It's just like a credit card. You rely on it once or twice to squeak by when the rent is due, then it becomes a habit. You find yourself overdrafting three or four times a month because, hey, it's there!

This wasn't a factor in my decision because I'm far beyond the temptation to spend money I don't have. My early years of credit card debt cured me of that. But anyone who recognizes in himself the tendency to overdo it should take this into consideration.

After serious consideration, I decided to keep my overdraft protection. It doesn't cost me any money to keep it active, and I know it's there in an emergency.

Keep in mind, though, that there are several forms of overdraft protection. Some banks, like mine, activate it up to a certain amount (in my case, $600) and simply require that you replace it within a certain amount of time. Others, however, require customers to link their checking accounts to savings, money market, credit card, or other accounts to cover those funds.

I've also chosen a bank that permits one free overdraft per year. It's kind of like accident forgiveness in the auto insurance industry, and it's a nice perk for those occasions when you can't prevent an overdraft.