Israelis may not say they like living on overdraft but many of them do. So many in fact that I'm going to assume they actually like it. My daughter had to go to the bank one day for something and noticed that some people in the bank that day seemed to be doing something related to overdrafting or at least talking about it (if they were doing something it would be either modifying an overdraft agreement or making payment under overdraft terms, etc.)
Obviously people in other countries live on overdraft also. There are things that make Israelis a bit more prone to this.
1. Disincentives to save. There are a few of these, for example the very high down payment needed to buy a house discourages young people from aspiring to this and thus discourages savings.
2. Loss leader overdraft protection fees. Most countries have high penalties for use of overdraft. I think that in Israel, some banks may have low introductory rates for overdraft protection and this keeps the initial rates low (this is a confusing issue because there are many steps in the overdraft system and I don't understand very much of it - and I don't intend to make a study of it either).
3. Easy access to moderate loans. Although it is very hard to get a loan big enough to buy a house, it is easy to get a loan large enough to go on a shopping spree.
4. Fun Stuff to Do. Israel has a lot of fun stuff to do that costs a lot relative to incomes
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