Overdraft protection and courtesy pay are two types of services offered by Georgia Heritage Federal Credit Union to help our members cover insufficient fund items that overdraw your checking account. While they may seem similar at first glance, there are some critical differences between the two.
An overdraft occurs when you do not have enough money in your account to cover a transaction, but it is approved and paid anyway. We can cover your overdrafts in two different ways:
Overdraft Protection (ODP)
- Available on all checking accounts using a savings account or any other account belonging to the member, using funds you already have.
Courtesy Pay
- Courtesy Pay is available on Premium Checking Accounts, but not on Advantage or Freedom Accounts.
- Members must Opt-in if they would like to receive this coverage on their Debit Card and ATM overdrafts
To learn more, ask us about these plans. Certain restrictions apply to a personal line of credit.
Standard overdraft protection is a service that links your checking account to another account. When requested, we can link your checking account to a line of credit loan to cover any overdrafts that may occur. When you overdraft your checking account, Georgia Heritage FCU will automatically transfer money from the linked account to cover the overdraft. While this can be a convenient way to avoid Courtesy Pay fees, there are still fees associated with the transfer itself, and you may be charged interest on the borrowed funds.
Two Important Policies to Keep in Mind When Selecting Overdraft Protection:
- Automatic transfer of funds from a designated account to a checking account to pay draft/ACH items.
- Available on all checking accounts using savings accounts and any other specified account belonging to the same member. Members can select multiple accounts for overdraft protection and the order overdraft protection will have to be set up.
For more information on how overdraft protection plans can help you, please contact us today.
Courtesy pay, on the other hand, is a service that Georgia Heritage FCU provides which adds protection to checking accounts by covering non-sufficient funds (NSF), up to an approved limit of $550. Members must specifically opt-in for coverage on ATM and one-time debit transactions if they want this coverage and can choose to opt out if they don’t want the coverage at all to be extended with their debit card usage.
A Few Other Guidelines to Keep in Mind When Choosing Courtesy Pay as a Member:
- No daily interest is charged if used.
- You have 30 days to bring your account back to a positive balance.
- Protects your credit rating if balance is brought positive in designated time period.
For additional regulations regarding courtesy pay, please contact a Georgia Heritage FCU associate.
So, which one should you choose? It really depends on your individual needs and circumstances. If you have a reliable source of funds to cover any potential overdrafts, such as a savings account or line-of-credit loan, overdraft protection may be the better choice for you. This way, you can avoid the potential fees associated with courtesy pay and still have the peace of mind of knowing that you won’t be charged an overdraft fee if you accidentally overdraft your account.
While overdraft protection and courtesy pay may seem similar, there are some critical differences between the two, and the best option for you will depend on your individual needs and circumstances.
Get in touch with one of our associates today to find out which overdraft solution works best for you.
