Understanding Overdrafts
It’s important to monitor your account balance and ensure you have sufficient funds before paying with your debit card. In this blog, we’ll cover what happens when you overdraw your accounts and provide ways to protect yourself from incurring credit union overdraft fees.
When you make payments and purchases that are more than your available balance in your checking account, your transactions may be declined, paid by us (causing your account to overdraw), or returned to the payee unpaid.
When your account overdraws due to non-sufficient funds (NSF), an NSF fee is charged to each transaction presented that cannot be covered by the balance on the account. This is also referred to as “insufficient funds,” and is what happens when you overdraft.
Don’t let a miscalculation affect your checking account when there are not enough funds to cover a transaction.
Tips to avoid overdraft fees
- Set aside a little money from each paycheck to help with future expenses
- Track all expenses and bills that are on auto-pay so you can correctly calculate the available balance in your account
- A bill you pay from your account may not draft from your account on the same day. Learn what the processing times are for your bills so that you don’t have any unexpected drafts from your account
- Activate alerts – you can set up account alerts, including low balance alerts, within online banking. Setting up the alert will notify you when your balance gets below a certain dollar amount
While we know not to spend more money than we have, we know life happens and understand that occasional situations may cause a credit union overdraft. We offer products and services to give you peace of mind in case of an emergency when your balance may not be enough to cover a charge.
- Automatic Transfer from Savings is your best option. This option, once it is set up, will transfer available funds from your savings account to cover any debits attempting to clear your account against insufficient funds. A $5.00 fee will be assessed for this convenience each time a transfer is made.
- Overdraft Protection is a line of credit (subject to application and credit approval) that is linked to your checking account. If your checking account does not have sufficient funds to cover a check, ACH, ATM, or card-purchase transaction, your Overdraft Protection will cover the transaction up to your approved credit limit. We offer Overdraft Protection lines, in amounts up to $25,000 with no annual fees.
- Courtesy Pay is not a loan. If you opt-in to this service, your debits (ATM, point of sale card purchases) against insufficient funds may be covered at our discretion as a courtesy and convenience to you. An NSF fee will be assessed for each item paid. You will be required to restore a positive account balance within 30 days, and we reserve the right to discontinue this service at any time. Please see our Account Agreement and Disclosure(Opens in a new Window) for more detailed information on this service.
The best way to avoid credit union overdraft fees is to be smart about your money. Make sure you have enough funds in your account to cover all of your payments, and don't let yourself get into debt. If you do find yourself overdrawn, contact us as soon as possible so we can help you out.
Have questions?
Restrictions apply and subject to credit approval.
