Allegan Credit Union’s Overdraft Options
At Allegan Credit Union, we care about your financial well-being and want to provide you with products and services that fit into your everyday life.
Overdrafts are ugly but they happen. Even if we diligently watch our account and write down every check and debit transaction; they can still happen. Thankfully, we offer a few solutions to help you through those ugly situations.
This type of transfer allows money to come from a savings account to help cover items that clear your checking account but you don’t have enough money for. It can be any savings account that you are on. When a check, ACH, or Debit transaction is presented to your checking account to get paid, for a small $2.00 fee, we will transfer whatever money is available to help clear the item.
What happens if you don’t have money in your checking account OR savings account to pay for an item? That’s where Courtesy Pay can help.
If you sign up for Courtesy Pay, we will help you pay for items that clear your checking account and we’ll help you up to $800 (that does include fees). We charge a $30 fee to clear each item, but they are paid. The company that gets their money and you will have 30 days to pay us back. It’s that simple! If you never use Courtesy Pay, you never pay for it. But it’s a great safety net for those accidental overdrafts happen.
Reg E Options
Regulation E governs Debit Card access to Courtesy Pay. If you decide that you want to have Courtesy Pay on your account, you have the ability to decide if you want your debit transactions to “see” that Courtesy Pay limit of $800.00.
- If you Opt In to Reg E – Your Debit Card will be able to access that $800 Courtesy Pay.
Example: You have $5 available in your checking account at Allegan Credit Union. You swipe your Debit Card at the convenience store for $10. Since you Opted In to Reg E, we will approve your transaction and charge you a fee of $30. This will result in your account being overdrawn -$35.
- If you Opt Out of Reg E – Your Debit Card will NOT be able to access that $800 Courtesy Pay.
Example: Using the same scenario as above, since you Opted Out of Reg E, the transaction would be declined because there is not enough money to cover the transaction. You would not overdraw your account and you would not be charged a fee.
Remember – you are able to turn on and off any of these services at any time. Just call us at 269-673-5465 or email us at email@example.com and we will reach out to you.
Available Balance vs Actual Balance
It is important to understand what happens when you authorize a transaction with your Debit Card because this is where you can run into fees you weren’t expecting to incur.
Q: What happens when I run my Debit Card?
A: When you authorize a transaction with your Debit Card, we put a hold on that amount of money and it becomes unavailable to be used until the hold is released and the Debit Transaction clears your account. This does not happen immediately; it can take 2 – 3 days for a debit transaction to clear your account. This is not a process that we have control over – it is up to each merchant and how they process their transactions.
Q: What do you mean you “hold” the amount of the Debit Transaction?
A: When we hold Debit transactions, you will notice an “Actual Balance” and “Available Balance” when you check your account.
- Actual Balance refers to the amount of money you have in your account prior to any Debit holds.
- Available Balance refers to the amount of money you have available after those holds have been authorized.
When we authorize Checks, ACH, or Debit transactions to clear your account, we look at the “Available Balance” to know whether or not the money is available to make sure that we don’t use money that was already set aside for Debit transactions.
Q: Can you give me example of how this would affect my account?
A: Of course!
Example: You have $75 in your checking account. You have Courtesy Pay and Reg E turned on. You go to the grocery store and run your Debit Card for $50. We would approve the transaction because the funds were fully available. This is what your account would look like after:
- Your Actual Balance is $100.
- Your Available Balance is $25.
Q: Using the above example, what would happen if I went out to lunch and ran my debit card for another $30?
A: We would approve the transaction because you have Courtesy Pay on your account and Reg E turned on. We would not charge a $30 fee yet because the debit transactions are still “holding”.
- Your Actual Balance would be $100.
- Your Available Balance would be -$5.
Q: Continuing with the same example, what would happen if I wrote my insurance company a check for $200 a week ago and it is now trying to clear when my “available balance” is negative at -$5?
A: We would pay the $200 check for you since you have Courtesy Pay turned on and we would also charge a $30 fee at this time.
- Your Actual Balance would be -$130.
- Your Available Balance would be -$235.
Q: What would happens to the two debit transactions that are holding in my checking account now?
A: This is important to understand since you would now get a fee for each of the debit transactions. This would result in your account being overdrawn a total of
Q: What if I brought in enough money to cover everything BEFORE the debits cleared?
A: If you brought in at least a $235 deposit before the two debit transactions cleared, we would not charge you the two fees. This is because the actual balance would be $105 and the available would be $0 when the two debits cleared your account.
Q: This is getting complicated! How do I avoid this all together?
A: There are a few ways:
- Opt Out of Reg E – this will prevent your debit card transactions from being approved when you do not have any available This will lessen the amount of fees you would receive.
- Check your balance more frequently. We have several ways for you to keep an eye on your balance and transactions:
- Mobile App – You can find us for Android or Apple!
- Text Banking – you can find out your actual and available balances by signing up for text banking!
- eNotices/eAlerts – you can get an email (or a text with Text Banking) notifying you when your balance drops below a certain amount. We can also send any overdraft and NSF notices to you via email or text.
- If you still are having problems, we are happy to have you sit with one of our Member Service Representatives to go over your register and see where you are running into problems! Just give out office a call at 269-673-5465!