Frequently asked questions

About Overdrafts

 

What is an overdraft?

An overdraft occurs when you don’t have enough money in your checking account to cover a transaction. This results in your account being “overdrawn.” Overdrawing your checking account can result in costly fees.

What happens if you overdraw your checking account?

When you overdraft your account, your bank can either pay the transaction or refuse to pay it, depending on several factors:

  • Courtesy Overdraft Option: When you open a checking account at most banks, you will have the option of opting-in or out of Courtesy Overdraft Option.
    • If you opt in, your bank will, at their discretion, pay the transaction and charge you a fee, which can range $30 to $50, depending on your financial institution. How much your bank charges is included in the account agreement you receive when you open your account.
    • If you opt out, your transactions, including point of purchase (swipe) transactions, bill payments, and ATM withdrawals will be declined. In most cases, depending on your financial institution, you will incur a fee when you overdraw your account. What’s more, if a check “bounces” and is returned to the person or company you wrote the check to, they could also charge you a fee.
  • Overdraft Protection: Most financial institutions offer customers additional overdraft protection services. These can include linking your savings account to your checking account. If you overdraw your checking account, funds can be automatically transferred from savings to cover the overdraft. Depending on the financial institution, there might be fees associated with transferring funds from savings to checking.
  • Overdraft Line of Credit: Another option offered by many banks, including BBVA, is an overdraft line of credit. In this scenario, a customer applies for and receives a line of credit, and funds from this line can be transferred to the customer’s checking account to cover overdrafts as necessary. There is a credit limit for most lines, which means you can only borrow up to a certain amount to cover overdrafts, and interest is charged on any balance unpaid by the end of each statement cycle. What’s more, there can be fees associated with transferring money from the credit line to a checking account to cover an overdraft.
As we transition to PNC, BBVA USA is no longer accepting applications for Overdraft Protection Line of Credit. Customers who had Overdraft Protection Line of Credit prior to June 19, 2021 will continue receiving this service.
 
 

Will an overdraft hurt my credit score?

An overdraft will not hurt your credit score if you promptly pay any overdraft fees and cover the transaction that caused the overdraft. If you do not make payment to the merchant or payee, or fail to pay your overdraft fees to your financial institution, you can be referred to collections, which would damage your credit score.

How much can I overdraft?

This varies based on your financial institution, but at BBVA, if you opt-in to our Courtesy Overdraft Option, you may overdraft and be charged an NSF fee per overdraft, up to six per day.

With other overdraft protection services, the number of allowable paid overdrafts per day is up to the bank’s discretion.



Protecting Against Overdrafts


What is overdraft protection?

Overdraft protection can help safeguard you against overdrafts, which occur when you do not have enough money available in your checking account to cover a transaction, such as a check or debit card transaction. Overdrafts can result in fees, and also having your transactions, such as debit card purchases, declined.

Overdraft options vary by bank, but you typically have several options to choose from. These include:

  • Courtesy Overdraft Protection: When you open a checking account at most banks, you will have the option of opting in or out of Courtesy Overdraft Option for ATM and everyday debit card transactions. 
    • If you opt-in, your bank may, at their discretion, authorize and pay transactions made against your account and, even if your account has non-sufficient funds. If this occurs, you will likely be charged an overdraft fee, which can range from $30 to $50, depending on your financial institution. How much your bank charges is included in the account agreement you receive when you open your account. There is no charge to opt-in to Courtesy Overdraft Protection.
    •  If you opt-out, your ATM and everyday debit card transactions will be declined if sufficient funds are not available in your account at the time of the transaction. In most cases, depending on your financial institution, you will incur a non-sufficient funds (NSF) fee when you overdraw your account. 
  • Overdraft Protection: most financial institutions offer customers additional overdraft protection services. These can include: 
    • Link to Savings Account. If you have a savings account at the same bank as your checking account, some banks will allow you to link your savings to your checking. If you overdraw your checking account, funds can be automatically transferred from savings to possibly cover the overdraft. Depending on the financial institution, there might be fees associated with transferring funds from savings to checking. 
    • Overdraft Protection Line of Credit. Another option offered by many banks, including BBVA, is an overdraft protection line of credit. In this scenario, if a customer applies and is approved for a line of credit, funds from this line can be transferred to the customer's checking account to help cover overdrafts as necessary.
    • There is a credit limit for most lines, which means you can only borrow up to a certain amount to help cover overdrafts, and interest is charged on any balance unpaid by the end of each statement cycle. What’s more, there can be fees associated with transferring money from the credit line to a checking account to help cover an overdraft.

As we transition to PNC, BBVA USA is no longer accepting applications for Overdraft Protection Line of Credit. Customers who had Overdraft Protection Line of Credit prior to June 19, 2021 will continue receiving this service.

Which overdraft protection is right for me?

Courtesy overdraft protection may be the best option if you do not have a savings account or you cannot qualify for an overdraft protection line of credit. This option typically has higher fees than either a link to savings account or line of credit. However, it can still prevent, at the bank’s discretion help to keep you from having checks returned to merchants and potentially paying additional returned check fees imposed by the merchant.

If you have a savings account or are able to qualify for a line of credit, these two options offer the least expensive protection. There are typically fees for transferring money from the savings account or utilizing the line of credit, but they are much smaller than courtesy overdraft fees.

For example, at BBVA, you’ll pay $12 ($7 in CA) per day to have funds transferred from savings to checking, or use of your line of credit. This is a per-day fee, not a per-item fee.

Whereas with Courtesy Overdraft Protection, BBVA charges $38 ($32 in CA) per overdraft, up to six per day.

Linking a savings account to your checking account may be the best option, however, because even though you will save on fees when you utilize a line of credit, you will be charged interest on the amount you borrow if you cannot pay it off within the statement cycle. This is not the case with savings-account linked overdraft protection.

How do I get overdraft protection?

To link a savings account or apply for a line of credit you will need to contact your bank. In some cases, such as at BBVA, you can opt in or opt out of Courtesy Overdraft Protection online.



About Overdraft Fees


What is an overdraft fee?

An overdraft occurs when a transaction is made and you do not have enough money in your account to cover the transaction. When this happens you may be charged an overdraft fee. There are two types of standard overdraft fees depending on whether or not the transaction is paid into overdraft.

  • Paid Item Overdraft Fee (NSF charge - Paid Item) is a fee charged when you make a transaction that exceeds your checking account's available balance but the bank pays the transaction
  • Returned Item Overdraft Fee (NSF Charge - Returned Item) is a fee charged when you make a transaction that exceeds your checking account's available balance and the bank does not pay the transaction, and the transaction is returned.

How much is an overdraft fee?

Overdraft fees vary by bank. At BBVA, you may be charged an NSF Paid Item fee of $38 ($32 in CA) each time we pay a transaction into overdraft, and an NSF Returned Item fee of $38 ($32 in CA) each time we return an item due to insufficient funds. There is a maximum of six (6) NSF fees that can be charged per calendar day to your consumer account.

In addition, if your account becomes overdrawn and remains overdrawn by more than $1.00 for seven (7) consecutive calendar days, an Extended Overdraft Service Charge of $23 will be assessed. An additional $23.00 Extended Overdraft Service Charge will be assessed for every seven (7) consecutive calendar days that your account remains overdrawn by more than $1.00. A maximum of four Extended Overdraft Service Charges may be assessed per overdraft occurrence.

Similarly, NSF fees vary by bank, but can be equally as costly as overdraft fees. Also, if your item, such as a check, is returned to the business you wrote the check to, the business also has the right to charge you a returned check fee.

Specifics about the fees on your checking account were included in the account agreement you received when you opened your account.

 

Enroll in overdraft protection

BBVA offers a variety of account management tools and overdraft protection programs to help safeguard you against overdrafts.