One of the most significant advantages to modern banking solutions, such as credit and debit cards, is the way they provide you with instant purchasing power. Instead of carrying cash everywhere, which is both unwieldy and unsafe, a quick swipe is all it takes. Whether you’re paying for a meal out with friends, some brand new clothes, or gas for your car, the instantaneous nature is what makes it so simple.
What happens when you swipe your debit card and nothing happens, though? Or when a waiter returns and sheepishly informs your party that the card has been declined? These embarrassing and frustrating situations, which often occur when you make a mistake in remembering your current balance, aren’t fun for anyone. They’re more than just a potential embarrassment; they can cause a real hassle, too, especially if you don’t have any other forms of payment on hand. No one wants to bounce a check, either, leaving an important bill unpaid. Aside from keeping meticulous track of your bank balance at all times, what else can you do?
Overdraft protection, an optional service offered by Resource One Credit Union to current members and cardholders, is the answer. This valuable service ensures you avoid the troublesome situations we just described while preserving your ability to make an instant payment. What do you need to know about this service, and why do you need it?
What is Overdraft Protection?
Overdraft protection is a simple service that, in typical banking, you shouldn’t need to use. However, it acts as a safety net to prevent the situation described above. When you use your debit credit or issue a check and, at the time of the transaction, there is not enough money in your account, the transaction will still complete. Instead of declining your card and leaving you scrambling for an alternate form of payment, your bank — in this case, Resource One — will process the transaction so you can make your balance whole again later. Overdraft protection works multiple times, so you don’t need to worry about using up an allotment only suddenly to have a transaction declined during the same outing. Of course, it’s always advisable to avoid putting your account too far into the red.
When Might You Need This Service?
There are many occasions when you might need overdraft protection, none of them particularly hard to imagine. One of the most common scenarios occurs when you have a low balance or you expect an incoming transaction to post, and you make a string of small purchases. For example, you might buy a coffee at Starbucks, then head to a convenience store to pick up some snacks. After running just a few errands, you’ve depleted your balance, and you run into the frustrating problem of having a transaction declined. With overdraft protection, though, the flow of your errands remains intact, and you can clear your overdraft later without any immediate concerns. This is just one example, but there are many occasions when an accidental overdraft may occur.
Overdraft Protection Comes With a Price
Overdraft protection is a very useful tool to have in your financial arsenal. It can save you from difficult situations, such as when you have no alternative form of payment to provide a restaurant. However, it is important to be aware that this is not a completely free service. It is also important to consider charges covered under overdraft protection as loans — and so it makes sense that a “loan” of money would come with a fee.
Although it is free to add overdraft protection to your account, it is a privilege that you must pay for when you do run your account into the red. Each transaction accrues a $30 fee. However, keep in mind that the cost of a declined transaction — also known as insufficient funds, or NSF fees — are also $30. Therefore, it is a winning proposition to add overdraft protection. It doesn’t cost you any extra, and it provides a substantial safety cushion.
Do Your Best to Avoid Overdraft Fees
Although this is a beneficial service, overdrawing or accruing NSF fees can be stressful, especially for those who live from one paycheck to the next. The best course of action, therefore, is to practice good financial habits that will prevent you from being in a position to overdraw in the first place. Routinely checking your account balance, as is possible via the R1CU smartphone app, will ensure you always know how much you can spend before running into trouble. The same is true when you write a check. Remember that it takes time for checks to process and clear, so keep the appropriate amount of money in your account to cover the transaction when it finally posts. With simple steps such as these, keeping your balance in the green is much easier.
Opt-In for Overdraft Assistance Today
Never worry about having your card declined or a check returned again when you opt-in for overdraft protection from Resource One Credit Union. You may need to cover a fee later, but you also won’t have to worry about missing out on a purchase. With our flexible banking solutions and customer-focused service, we hope to continue making it even easier to handle the daily financial needs you face. To learn more about overdraft protection, fees, and other important information, contact us today. For immediate details on opting in for this service, give us a call at 800-375-3674 to discuss the process.