Explained: Overdraft Protection and Courtesy Pay
Many of us have had that moment. A forgotten automatic payment hits your account, or a check that took weeks to clear is finally cashed, and suddenly, your account is closing in on a negative number. Even something as simple as transposing a number when updating your budget or balancing your checkbook can cause overdrafts for the most cautious consumers.
A few ways to protect your account include setting up an overdraft transfer from another account to cover the item or Courtesy Pay, which will cover the item for a fee even if you don't have funds in another account.
What is Overdraft Protection?
The good news is the credit union offers Overdraft Protection to our members. This service allows payments you made to clear by transferring money from another account or even a personal loan if you don't have enough money in your checking account to cover the total amount.
By shifting money from your savings account to checking to cover the difference, you avoid the insufficient funds fee and the embarrassment of a denial. Many institutions charge a small fee for this service.
Benefits of Overdraft Protection
The most significant benefits of Overdraft Protection are financial in nature and can include any of the following:
- Prevents declined debit card transactions.
- Allows you to avoid returned check fees from companies you pay.
- Spares your reputation with your institution from the hit of bouncing a check.
- Protects you from losing vital services like water, gas, or power due to non-payment or NSF (Non-sufficient funds) checks.
What is Courtesy Pay?
Courtesy Pay is another layer of protection for your checking account, designed to cover transactions when both your checking balance and Overdraft Protection sources are insufficient.
When a transaction exceeds your available balance and Overdraft Protection is unavailable or exhausted, Courtesy Pay may cover the transaction up to a predefined limit, allowing it to be processed successfully. The account will be overdrawn to a negative balance when a transaction requires Courtesy Pay.
Benefits of Courtesy Pay
Similar to the benefits mentioned for Overdraft Protection, Courtesy Pay offers convenience and peace of mind.
- Cover Unexpected Shortfalls: Offers an extra layer to cover unplanned expenses.
- Prevent Inconvenience: Avoids disruption in payment schedules or unplanned lapses in services like utilities.
- Protect Your Reputation: Helps maintain a healthy financial image by preventing returned checks or debit card declines at the checkout.
Do You Need Overdraft Protection or Courtesy Pay?
Everyone has unexpected expenses hit at some point in time. Perhaps a yearly subscription payment for Satellite Radio or a quarterly insurance payment you forgot about, even monthly subscription box services that hit at the wrong time can create challenges for your budget and checkbook.
Having a financial safety net in place can save you from embarrassment at the checkout, being charged additional fees by the payee, and give you peace of mind when swiping your debit card.
Overdraft Protection and Courtesy Pay can be critical benefits if your account frequently goes into negative numbers. However, you might want to consider revising your budget instead if you’re constantly utilizing these services and incurring regular fees.
Are There Fees for these services?
Overdraft Protection can come with a fee, as you get a value for this protection. Some more common are usually between $10 and $35 or daily interest fees until your balance is corrected. CAMPUS charges only $8 for each Overdraft Protection transaction.
CAMPUS offers Courtesy Pay to members who opt-in to the service. With each transaction, the account is charged a $35 fee.
It’s a good idea to regularly monitor your account balances through online/mobile banking and maintain a current budget.
CAMPUS Can Help!
There are many ways to pay for an item or service. From traditional checks and debit cards to online and mobile payments, one can quickly lose track of their current balance. Your financial wellness is our priority. Please connect with our friendly and knowledgeable representatives to further discuss how Overdraft Protection and Courtesy Pay can provide you with a seamless banking experience. Visit us at a convenient service center, chat online, or call us at 800-367-6440.
TIP: Overdraft Protection is not always automatic. You may need to request the privilege of Overdraft Protection from your financial institution. While some institutions will make the transfer automatically, others will alert you and request permission to make the transfer. Each financial institution is different in how it handles Overdraft Protection.
By Campus USA at 20 Oct 2023, 17:22 PM