The Ins and Outs of Opting in for Overdraft Protection

Starting July 1st for new checking accounts, and August 15th for existing ones, you will have to let your bank or credit union know if you wish to have overdraft protection. This is a change from how things have been handled in the past, when banks would automatically add this feature to your account without requiring your written consent. So here’s how it will affect you:

If you decide NOT to opt-in:

  • Any point-of-sale debit transactions that exceed your available balance will be rejected at the register. In other words, you could be in for a very public embarrassment in the check-out line.
  • Not opting in will save you the cost of overdraft fees that could occur from debit transactions that run you over the limit since you will no longer be able to complete those transactions.
  • Alternatives to opting in include tethering your checking account to a savings account or an existing low interest credit card. Both will allow you protection similar to an overdraft line of credit, yet will be less expensive when you use them.

If you answer YES to opt-in:

  • You will be able to use an overdraft line of credit for your debit transactions, and will be subject to the same fees (up to $39) for each occurrence.
  • Most overdraft lines of credit also carry high interest rates on balances.
  • Overdraft protection for paper checks and direct wire transactions is not a part of the new changes, and will continue without the need to opt-in.

Always be mindful of your balance so that you are not in danger of overdrawing your account. If you are worried about your finances, get help now by contacting Clearpoint Credit Counseling Solutions for a free financial review. This can be done online at or by calling toll-free at 877-877-1995.

Clearpoint has been helping consumers with their personal finance goals and debt repayment strategies since 1964. Today, we work with consumers all over the country through counseling that is administered online, in person or over the phone. Learn about our services today!

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