Updated on August 14, 2022
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!
In order for your account to go overdrawn, there are several possible approaches. Staying on top of this will help you avoid the bad things that may happen in the future if you pay attention.
Series of Purchases Without Maintaining an Accurate Record
Paper checks and conventional paper receipts, according to some, made it easier to keep track of one’s spending. Digital payments, on the other hand, can lead to overspending.
In the end, it all comes down to how well you track your spending over time. Debit card overdrafts are frequently caused by erroneous, unreported transactions.
“Swipe and pay” or online payments, on the other hand, can readily entice beginners. Since they will be spending more than they have in the account, this will result.
You may also be able to buy now and pay later in instalments with some debit card programmes or online stores. This may appear to be an attractive alternative, but you are actually signing on to a long-term debt.
Debited Automatically from Your Credit Card Before the Due Date
We have the option of having our bank account debited on a regular basis. As a result, all of your pre-authorized expenses for things like gym memberships, medical bills, and internet service will be deducted from your bank account.
When you don’t have enough money in your account to pay a bill, automated payments can result in an overdraft.
This is usually the case if the billing date was picked with the payday in mind, but a holiday or other occurrences cause your salary to be transferred later. This can lead to a bank overdraft.
At times you weren’t aware of, pending authorizations were cleared.
When you have pending authorizations on your debit card, they can result in a withdrawal that you’re not even aware of.
In order to avoid an overdraft, the card won’t ask for your approval or notify you if it overdraws while making permitted purchases.
In addition, there would be a fine for going overdrawn.
The overdraft cost is the same whether you take out $15 or $60, therefore it’s best to take the maximum amount out if you’re on a programme that results in overdrafts of a specified number of dollars, like $60.
Updated Transaction Logs
Debit and credit card payments are logged quickly, however the system may take some time to update the transactions and reflect the new amount.
Consequently, when you pay a payment and check your bank account, it may appear like you have enough money to go around, even though some of it is no longer there.
If you are accustomed to tracking your own money, this may not be a problem.
Is It A Good Idea? Pros and Cons of Overdrafting
You must first sign up for overdraft protection before you may make an overdraft. Any transaction that leads in an over-withdrawal will be rejected if it lacks this functionality.
The real question is whether or not you should use overdraft protection at all. The following are some things to keep in mind when it comes to this situation.
Allowing Overdrafts is a good idea
Pay a fee of $35 each time you want to access more money.
Otherwise, your account’s balance could fall into the negative.
Retailers will not be charged a fee if a customer returns a check.
You won’t miss a payment because the overdraft will take care of it for you.
For what reasons should you not permit an overdraft?
Having to pay a charge for a returned check might quickly add up.
If the debit card is unable to withdraw the amount, it may be rejected.
Your checks may not be accepted by all shops.
Your account will be charged a late payment fee if you fail to pay your payments on time.
How to Purposefully Overdraw a Debit Card
Although overdrafting has its drawbacks as well, they’re just as many as the benefits. As a result, it may be wise to look into other options. You can have a look at a few of these choices.
With a savings account connected to your checking, many banks will enable you to be overdrawn on that account.
Overdraft costs can be avoided if you set up an automatic withdrawal from your savings account when your balance falls below a certain level.
Although some institutions may charge a fee for this action, it is not uncommon. For those who can’t afford to pay the price, there is another option.
- Money Loan Apps
Over 500 apps already exist that allow you to borrow money for free or at a very cheap interest rate.
When it comes to applying for a loan, there is no need to worry about your credit history.
Selecting an instant money loans app from our comprehensive list will save you time!
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.