What’s an overdraft and what causes it?
An overdraft happens when you don’t have enough available money in your checking account to clear a transaction. Vantage offers various overdraft protection options to cover expenses that result in an overdraft in your account. These are useful features as they can protect you from merchant fees and/or the embarrassment of being turned down at check out for lack of funds.
For Vantage to cover your overdrafts on ATM and everyday debit card transactions, you need to consent to our extended Courtesy Pay service. Regulation prohibits financial institutions from charging consumers fees for paying overdrafts on ATM and everyday debit card transactions, unless a consumer requests (consents to) the overdraft service for those types of transactions. In an overdraft instance, then, your consent means your ATM and/or debit card purchase will be allowed to go through and your account will be drawn negative in order for you to complete your debit purchase or ATM withdrawal.
Consider these scenarios:
You’re at the grocery store checkout with a grocery cart full of groceries. Your items add up to a little more than the $185 in your checking account. Would you want your Vantage debit card transaction to be approved?
You’re out of town and your car breaks down. To get it fixed, you need to pay $400, but you only have $290 in your Vantage checking account, and you don’t have a credit card with you. Would you want your Vantage debit card transaction to be approved?
It’s Sunday afternoon and you need $200 from an ATM to pay for concert tickets that just became available. If you don’t buy them now, they will go to someone else. Do you want to receive the cash and draw your account negative?
Please note that you’ll have to request extended Courtesy Pay for each of your checking accounts. Most importantly, if you do not choose extended Courtesy Pay, Vantage Credit Union WILL NOT authorize and pay overdrafts for ATM and everyday debit card transactions, which may lead to purchases and/or ATM withdrawals being declined.
What’s overdraft protection?
Overdraft protection is a feature of a checking account that acts as a “safety net” that covers your transactions and keeps you from incurring certain merchant fees should you overdraw your checking account.
How does overdraft protection work?
We offer three types of overdraft protection, which are tapped in the following order: a Personal Line-of-Credit, coverage from your Regular Savings, and coverage from our Courtesy Pay service. If you overdraw your available checking account balance and have a linked Personal Line-of-Credit, funds are automatically transferred from the line-of-credit to cover your overdrafts for a nominal fee. You must apply and be approved for this service and, since it is a loan, an interest rate applies.
If you don’t have a linked Personal Line-of-Credit or have exhausted your credit line, funds are automatically transferred from your Regular Savings to cover your overdrafts. Due to Federal Regulation D, the total number of pre-authorized transfers and/or withdrawals and overdraft transfers that can be completed from your Regular Savings account is limited to six each month. Each automatic overdraft protection transfer from Regular Savings does incur a nominal fee. Once you’ve exceeded your Personal Line-of-Credit and/or your Regular Savings available balance doesn’t cover your overdraft, or you’ve reached the transaction limitation set forth by Regulation D, our discretionary Courtesy Pay Service may cover eligible overdrafts after first deducting our standard Courtesy Pay Fee for each overdraft transaction.
How do I make payments or pay off my Personal Line-of-Credit balance?
Automatic payments are required and due on the 26th of each month. You can choose to make a minimum payment, pay a set dollar amount, or pay the balance in full automatically. It’s important to note that when you make a deposit to your Vantage checking account, we can’t automatically pay off your Personal Line-of-Credit balance unless you tell us to do so. You can always make additional payments via online transfer or at any of our branch locations.
What happens if my Personal Line-of-Credit limit is reached and I overdraw my checking account?
Available funds are automatically transferred from your Regular Savings to cover your overdrafts. Due to Federal Regulation D, the total number of pre-authorized transfers and/or withdrawals and overdraft transfers that can be completed from your Regular Savings account is limited to six each month. Each automatic overdraft protection transfer from Regular Savings does incur a nominal fee. If your overdraft amount and applicable fee(s) exceed your Personal Line-of-Credit and your Regular Savings available balance, our discretionary Courtesy Pay service may cover eligible overdrafts after first deducting our standard Courtesy Pay Fee for each overdraft transaction covered by our discretionary Courtesy Pay service. If the options mentioned above aren’t available or have been exhausted, the outstanding items can’t be processed and will be returned. This will result in a fee(s) being assessed for these items.
What happens if I have the overdraft protection from my Regular Savings and I overdraw my checking balance, but no funds are available in my Regular Savings to cover the clearing item(s)?
A: If your overdraft amount and applicable fee(s) exceed your Regular Savings available balance, our discretionary Courtesy Pay service may cover eligible overdrafts after first deducting our standard Courtesy Pay Fee for each overdraft transaction. If the option above isn’t available, or has been exhausted, the outstanding items can’t be processed and will be returned. This will result in a fee(s) assessed for these items. Please review the following important information regarding our discretionary Courtesy Pay service:
- Our standard Courtesy Pay Fee of $35 will be charged for each overdraft item that is paid by Courtesy Pay. This includes overdrafts caused by checks, in-person withdrawals, automated payments (ACH), or by other electronic means. This fee is the same amount that we charge for items drawn against insufficient funds and returned to the payee.
- Vantage has the discretion, but is not agreeing and does not have an obligation to pay your overdrafts and we may remove this courtesy at any time. An overdrawn balance must be repaid within 35 days or your Courtesy Pay limit may be removed.
- An automatic link to the Regular Savings account or a line-of-credit is a less expensive option than an overdraft.
- Transactions may not be processed in the order in which they occurred, and the order in which transactions are received and processed may impact the total amount of fees assessed. A single larger overdraft will result in just one fee, as opposed to multiple smaller overdrafts.
- Good account management is the best way to avoid overdrafts. Use our eBranch, mobile or Automated Phone Access telephone access services to keep track of your balance.
- If multiple items are presented against your account on the same day, each item will be assessed an appropriate Fee. Fees charged for covering overdrafts, as well as the amount of the overdraft item, will be subtracted from this Courtesy Pay limit as items are paid. It may be possible that your account will become overdrawn in excess of the Courtesy Pay limit as a result of the assessment of a fee.
- Balances at an ATM or other point of inquiry will not include the Courtesy Pay limit; however under payment system rules, Vantage may be obligated to pay some unauthorized debit card transactions. Vantage will not authorize debit card or ATM transactions unless there are available funds (including Courtesy Pay Options) to cover the transactions and any fee(s).
- Giving us your consent to pay every day debit card and ATM overdrafts may result in you incurring overdraft fees for transactions that we would otherwise be required to pay without assessing an overdraft fee. However, this would allow us to authorize transactions up to the amount of your Courtesy Pay limit and may also help you avoid overdrafts in excess of your available funds that could result in restriction of your debit card.
- We may restrict your debit card use if you incur overdrafts in excess of the available funds in your account, including any Courtesy Pay limit.
- Vantage will place a hold on your account for any authorized debit card transaction until the transaction settles (usually within two business days) or as permitted by payment system rules. In some cases, the hold may exceed the amount of the transaction.
- Courtesy Pay is not a line-of-credit; it is a discretionary overdraft service that can be discontinued at any time without prior notice.
- Courtesy Pay may be discontinued if you default on any loan or other obligation to us; your account becomes subject to any legal or administrative order or levy; or you fail to maintain your account in good standing by not bringing your account to a positive balance within thirty-five days for a minimum
of one business day.
- Each Account owner will continue to be liable, jointly and severally, for all overdraft and fee amounts, as described in the Membership and Account Agreement and Fee Schedule. The total (negative) balance, including all fees and charges, is due and payable upon demand.