Having a line of credit and overdraft protection can help you avoid embarrassment or getting a bad reputation as a company who bounces checks, if you just can't quite get the spending under control.
Opting out does bring the risk of having a debit card transaction declined in the event of insufficient funds in a checking account; however, it also means the accountholder will not encounter the fees associated with overdraft.
When you have business overdraft protection, then the money transfers automatically to your bank account to pay a check or to allow you or your employee to use your debit card, even if you have a $0 balance in the bank.
Unfortunately, many people have reported problems with the First USA bank card that have prevented them from making timely payments, thus lowing their credit score, or resulting in overdraft fees that must be paid.
You may even end up spending more than you have, which means you get the dreaded "Your card has been declined" spiel or if you happen to have savings, you see it decline every month due to overdraft charges.
Some financial institutions made it standard to allow accountholders to withdraw money from ATMs despite an insufficient account balance, but then turned around and charged the overdraft fee for the service.
This means that you have to specifically grant your financial institution permission to cover any purchase attempts with your debit card and charge you an overdraft fee as a result of the overdraft action.
Make no mistake about it, however; this courtesy can be an eraft, so an afternoon shopping at four different stores can result in four different overdraft fees.xpensive one if overdrafts start to pile up.
The reason why the overdraft protection is oftentimes referred to as "courtesy" overdraft is because the financial institution allows for the overdraft to take place without first notifying the customer.
Your financial institution will probably ask you to opt in to overdraft protection and will outline the merits and potential costs of accepting overdraft protection on your checking account.