Running Low on Funds?
Everyone has had that day when a purchase needs to be made, but the funds available in the checking account are extra low or nonexistent. It is important to make sure your overdraft options are in the proper order to minimize the fees your checking account could be charged in this situation.
#1. Savings or Money Market
Your Prime Share Savings account or Money Market is the first defense against a negative Checking account balance. It is important to note that you can use Prime Share Savings or a Money Market as a source of overdraft, but not both. If there are not enough available funds in the Checking account to pay a transaction, the account will look to the next overdraft source which is automatically set up as the Prime Share Savings account. This can always be switched to your Money Market account if you would like. There are no fees for this service, but because of Regulation D this option can only be used 6 times per month. If the Regulation D limit is met during the month, no funds will transfer from the Prime Share Savings or Money Market to cover the purchase and fees become a possibility unless you have an Overdraft Line of Credit.
#2. Overdraft Line of Credit (LOC)
Our Overdraft Line of Credit is a support tool for your Checking account to help avoid overdraft fees. The Overdraft Line of Credit is typically a small revolving loan on your account that will transfer funds into your Checking if there are not enough available funds. The Overdraft Line of Credit will transfer the amount the purchase requires for authorization up to the loan’s credit limit. It is true that this loan does accrue interest at 17.50% APR on any owing balances, but this is pennies compared to the $30.00 fee you could be receiving for every transaction that takes the Checking account balance negative. If you are interested in applying for the Overdraft Line of Credit to further support your checking account, please click here.
#3. Overdraft Privilege (ODP) and Debit Card Advantage (DCA)
Overdraft Privilege and Debit Card Advantage are courtesy services the credit union offers to assist members when they find themselves in a tough financial spot. Both of these services will allow you to take your Checking account negative up to a combined amount of $500.00 including fees. If you find that you need to use one of these services, it is best to visit an ATM and withdraw the cash that is needed for purchases. This way your account is only charged one $30.00 fee rather than a $30.00 fee for every transaction that presents to your checking account while you are negative. For full details check out Overdraft Privilege and Debit Card Advantage Disclosures.