As negative as the connotation “overdraft” may sound, it is helpful to know how to overdraft a debit card on purpose so you can avail this option in times of need.
What Will We Talk About Here?
1. You can overdraft at an ATM if you have overdraft protection but will need to pay a fee of up to $35 or more.
2. Automated bills, pending payments, spending without tracking the expenses and delayed account updates can all result in overdrafting from your debit card.
3. Those who wish to avoid an overdraft on the debit card can sign-up for savings account or make use of money loans apps.
…and Much More!
What It Means To Overdraft a Debit Card on Purpose
Debit cards are handy and with the help of online accounts, they can also help you keep track of your expenditure. In fact, they are a reliable alternative to your checking account when paying bills or shopping online.
- You can also overdraft via your debit card when you don’t have sufficient funds in your account.
Although there are helpful loan programs, you sometimes don’t have the luxury of waiting for the approval and need cash right away.
You can then overdraw from your debit card without sufficient funds. Moreover, some banks let you sign-up for overdraft protection so the transaction is not turned down. You may have to pay a fee as high as $35 per transfer.
How To Overdraft a Debit Card On Purpose and Make Up For The Damage!
There are different ways in which your account may overdraft. Staying on top of this can help you avoid the unfavorable events in the future.
Series of Purchases Without Keeping a Proper Track
Some people are of the view that paper checks and conventional paper receipts helped to keep track of expenditure. Conversely, digital payments can result in overspending.
- It all depends on how keenly you can assess what you are spending over time. Untracked payments are a major reason why debit cards are over drafted sometime.
However, newbies easily get carried away by “swipe and pay” or online payments. Consequently, they will be spending more than what they have in the account.
Additionally, some debit card programs or online retailers allow you to buy now and pay later in installments. This can seem like an attractive option when, in fact, you are committing to a debt.
Automated Charges Debited Early From Your Card
We can opt for automatic payments from our bank account. This means all such authorized transactions such as gym fee, medical bills, internet charges or more would be automatically taken out from your account.
- Automated payments can result in overdraft by withdrawing over negative balance when you don’t have enough funds to pay a bill.
This is typically true when you have chosen the billing date keeping in view the payday but holiday or some events leading to later transfer of your paycheck. This can overdraw your account.
Pending Authorizations Cleared At Times You Weren’t Aware Of
Pending authorizations can result in withdrawal from the debit card when you are not even aware of.
This is because the card won’t ask for the permission or inform you when it overdrafting while paying for authorized transactions.
- Additionally, the overdraft would be accompanied with a fee as well.
If you are under a program that results in overdraft of a specific amount, say $60, even when you only need to take out $15, it is better to withdraw the maximum funds as the overdraft fee is going to be the same regardless of what you are taking out.
Late Updated Transaction History
Payments from debit or credit cards are immediately recorded but it can take a while for the system to update the transactions and show the new, remaining balance.
So when you clear a bill and check the account, it may give the impression that you have sufficient money to utilize when, in fact, some of it isn’t even there anymore.
- This may not be a problem if you are habitual of tracking your payments by yourself.
To Do Or Not To Do? Overdrafting Pros and Cons
Before you proceed to make an overdraft, you have to sign up for overdraft protection. Without this feature, any transaction that results in over-withdrawal will be turned down.
So, should you even opt for overdraft protection or not? There are a number of things to consider in this regards.
- Why You Should Allow Overdraft
- Pay $35 for accessing more funds each time.
- The balance in your account may go into negative otherwise.
- There will be no returned check fee at retailers.
- You won’t be late in paying the bills because the overdraft can cover it.
- Why You Should Not Allow Overdraft
- Returned check fee can add up to a lot.
- The debit card may be denied if it can’t withdraw the amount.
- Some retailers may not accept your checks.
- Late payment fee would be added to your account when you don’t clear the bills on time.
How To Overdraft a Debit Card on Purpose – Alternatives
As you can see, overdrafting has its shares of cons and the list is comparable to the advantages. Therefore, it might be a smart move to explore alternatives as well. Here a few options that you can check out.
- Savings Account
There are many banks that allow you to overdraft from a savings account that is linked to the checking account.
When your balance becomes negative, it would automatically withdraw specific amount from your savings to help you avoid overdraft fees.
However, some institutes might also charge a service fee for this action. If you can not afford to pay the fee, you can think about utilizing the other alternative.
- Money Loan Apps
Currently, there are more than 500+ apps that allow you to borrow money with or without minimal charges.
In fact, some of them do not even run a check on your credit score so you don’t need to worry about credit history.
You can save time by choosing from the impeccable list of of instant money loans app that we wrote about in detail!
The Bottom Line
Overdrafting may seem like the only option during an emergency but you should keep in mind that it comes with a fee and its share of disadvantages.
- If you couldn’t avoid making an overdraft, try your best to pay back the amount within the time frame to minimize fees and charges.
Nonetheless, it is better to explore alternatives to overdrafting rather than keeping it as your first option in rough times.
Frequently Asked Questions About How To Overdraft a Debit Card on Purpose
Is it possible to overdraft amount from a debit card?
Yes. However, you need to enable overdraft protection before doing so. Otherwise, your transaction may be turned down. Moreover, there are linked fees that you have to watch out for.
Can I still pay from my debit card if I don’t have sufficient funds?
Many debit card companies allow transactions to proceed even if the user does not have enough funds in the linked bank account. The transfer would complete but the over-draft fee is charges for exceeding the limit. There may be additional fee if you don’t pay back the amount timely.
How can I use my debit card at an ATM with insufficient funds?
You can use the debit card at an ATM to over-draw an amount without any hassle if you have the overdraft protection. The debit card will allow for such a transfer even if your account already have a negative balance.
Can I overdraft using Cash App card?
Yes. Cash App card allows you to overdraft and, in fact, it does not even charge a penalty fee. There are also no interest on the overdraft amount.
Jamie Johnson is very enthusiastic Kansas City – based freelance writer, and her core expertise are finance and insurance. She has been endorsed on several personal finance, insurance & business website to share her thoughts. Her publications can be found on famous sites like Bankrate, The Balance, Business Insider, Chamber of Commerce and many others.
From many years, she served more than 10,000 hours of research and writing to more than 2000 articles related to personal finance, credit building, mortgages, and personal and student loans.