Overdraft Protection

Firstmark Credit Union's Overdraft Protection Service for checking accounts is designed to help you in the event you do not have sufficient funds in your account to cover a transaction.  Overdraft Protection adds an extra layer of protection and provides a safety net to your checking account.  If your checking account balance runs short, Overdraft Protection will cover a transaction that might otherwise be returned up to an approved Overdraft Protection Limit. 

Overdraft Protection saves you additional merchant fees, possible damage to your credit history, and any embarrassment that might result if a check/ACH Debit transaction was returned.  There is no fee for Overdraft Protection unless you use the service.

Firstmark Credit Union provides many different ways to help you avoid overdrawing your account.  We offer free Online Banking so you can check your account balance every day in real-time, review payments made, view checks you’ve written, and transfer funds between your accounts. 

Nevertheless, NSFs do occur, and when they do, we offer Overdraft Protection, Share Draft Protection and Overdraft Protection Loans options to help ensure that your payments go through as you intended. 

For more information about Overdraft Protection please review some Frequently Asked Questions below or call (210) 442-0100 to speak to a member service.

[ + ] Learn More About Overdraft Fees And How To Avoid Them

What is an Overdraft?
Overdrafts occur and an overdraft fee is charged to you when a debit transaction (for example, a check, ATM withdrawal ACH Debit transaction or debit card purchase) exceeds the available balance in your account and the credit union still approves the transaction. As a checking account holder, you know how important it is to keep track of your balances to avoid the inconvenience and expense of overdrafts and accompanying fees.

How does Overdraft Protection work?
If you overdraw your account by a check, ACH electronic payment, bill pay, or point-of-sale debit card transaction, Overdraft Protection may cover your transaction even though you do not have enough money in your account.  If Overdraft Protection is activated, your account will have a negative balance.  You will incur a $28.00 overdraft fee; however, you will not incur any merchant fees.

If you have established overdraft protection to cover a negative balance through an automatic transfer from a savings account or approved line of credit, the Credit Union will access funds from these sources before using your Overdraft Protection overdraft limit.

You do not have to sign up for Overdraft Protection to work for your paper checks, BillPay or electronic (ACH) items you originated from your checking account.  However, you do have to "Opt-In" if you want the protection of Overdraft Protection to apply to your everyday debit card transactions by completing the Courtesy Opt-In Form.

Can I make a deposit to cover an overdraft and avoid fees?
If you overdraw your account during the day, you may be able cover it and avoid overdraft fees by making a sufficient deposit that same day. Review the credit union's funds availability policy to determine which deposits could become available the same day.

Manage your account to avoid overdraft fees
The simplest way to avoid overdrafts is to balance your checking account on a daily basis. Be sure to record fees and regular account charges and don't assume transactions will not post to your account for several days.  You can also avoid overdrafts by signing up for online banking alerts to know when your account is reaching a certain balance.

Can I sign up for an automatic transfer to avoid overdrafts fees?
Yes.  Firstmark Credit Union will automatically transfer funds from your other checking or savings account (Share Draft Protection) or your Overdraft Protection Loan when transactions are presented that will overdraw your primary account.  

[ + ] Understanding The Costs Involved

We encourage you to maintain accurate records and practice good account management.  This will help you avoid writing checks or drafts without sufficient funds and incurring the resulting fees. 

The Costs Of Overdrafts At Firstmark Credit Union Fees
Good Account Management $0.00
Insufficient Funds Fee $28/item
Overdraft Protection Fee (overdraft courtesy) $28/item
Overdraft Protection Transfer from Loan Account Fee (Automated, Call-In, In-Person) $1 (in excess of 6 per month)

[ + ] Understanding Your Balance

Reading Your Balance Mon Tues Wed
Starting available balance* $1,000 $1,575 $1,575
Starting current balance $1,000 $1,600 $1,600
Debit Card purchase: sushi lunch ($25 + $5 tip) -$25 -$25 -$30
Direct Deposit: Jane's paycheck +$600 - -
Personal Check: $100 to Jane's doctor $0 - -$100
Ending available balance* $1,575 $1,575 $1,470
Ending current balance $1,000 $1,600 $1,470

* as seen in online banking

[ + ] What is Available balance?

Available Balance = Current Balance - Pending Withdrawals/Debits + Pending Deposits/Credits

Your "available balance" is the balance in your account after deducting (1) deposits that are not yet available for withdrawal under our Funds Availability Policy, (2) debit card or other transactions that we are legally obligated to pay or have already paid, (3) other pending transactions such as ACH transactions, and (4) any holds on your account, such as holds on funds to comply with court orders or other legal requirements.

Your available balance is the amount of funds you have in your account that you can withdraw or access. The credit union uses the available balance when deciding to pay items that may overdraw your account.  The available balance can be negative if you overdraw your account.

Current (ledger) balance
The current balance is the balance of the account with pending transactions that have not cleared yet. (Pending checks deposited/cashed, debit transactions, direct deposit, etc...) Therefore you do not have access to those funds at this point but they are going to be posted to the account once they clear.

What is an outstanding debit card authorization?
An outstanding debit card authorization is the amount immediately deducted from your available balance while the credit union waits for the final settlement request from the merchant, which can take several days. A final settlement request is an instruction from the merchant to the credit union to deduct the exact amount of your final purchase. It follows after the debit card authorization request and completes the transaction. While the majority of transactions are settled within one business day, the actual timing rests with the merchant and is out of the credit union’s control.

Keep in mind, until the final settlement, the outstanding authorization amount may be larger or smaller than your actual purchase amount. In some cases when final settlement is delayed, the outstanding authorization is released, which causes your available balance to appear larger than you might otherwise expect.

Can an outstanding debit card authorization result in overdraft fees for me?
A merchant's outstanding debit card authorization request will alter the available balance in your account.  If, as a result, your available balance falls below zero, then overdraft fees will be charged for any transactions that post to or clears your account. For example, a debit card authorization may lead to overdraft fees in certain circumstances:

  • Those who spend the funds in their account, anticipating a delay between purchase and settlement, may experience an overdraft fee. This is because the outstanding debit card authorization reduces the available balance in the account even though the actual purchase has not posted yet.

    Example: Bob has a $100 available balance and makes a $75 debit card purchase. His available balance will be immediately reduced by $75, or the amount of the outstanding debit card authorization. If he makes another purchase or withdrawal beyond the remaining available balance of $25, it will result in an overdraft fee.

  • If a merchant obtains an authorization for your debit card, but then your purchase is paid for by other means, the merchant must submit a reversing transaction to remove the debit card authorization. If they do not do this, the available balance will be reduced until the hold expires, normally three business days.

    Example: Sally has $250 in her account and uses her debit card to pay $175 for concert tickets. She decides, after the card is swiped, to pay by cash. The concert venue does not reverse her debit card authorization immediately and her available balance is reduced by $175. That night, a $200 check she had previously written posts to her account. As a result the account is overdrawn and a fee is charged.

Will the debit card preauthorization hold always equal the exact amount of my transaction?
No. Some merchants, especially gas stations, hotels and sometimes restaurants, will preauthorize an amount that is higher or lower than the actual purchase amount. For example:

  • Gas stations: Many gas stations preauthorize transactions for amounts ranging from $1 to $95 because they do not know how much gas you will actually pump in advance of your transaction. If they preauthorize $95, we will place a hold for $95, even if your actual transaction is only $45. After 2 hours, the gas station must send the final transaction amount which will cause the hold to be for the correct amount.  If you are worried about large preauthorization holds from gas stations, we recommend that you use a Firstmark Credit Union credit card for your transaction.
  • Hotels: When using a debit card to make reservations in advance, hotels generally will preauthorize an amount equal to an overnight stay, or more, depending on the length of your stay. This will result in a hold on your account up to 72 hours. Then, when you actually arrive, the hotel will place another preauthorization, often larger than the cost of your stay to cover possible incidental expenses. Because these can result in significant holds against your account, we recommend always using your Firstmark Credit Union credit card for hotel reservations.
  • Car Rental Companies.  When renting an automobile, most car rental companies will authorize an amount greater than the actual cost to cover any additional expenses.  We recommend using your Firstmark Credit Union credit card when renting an automobile.
  • Restaurants.  Many restaurants authorize an amount that is slightly larger than the bill in the event that you include gratuity on your card transaction.  Alternatively, the restaurant may authorize the amount of bill which does not include any gratuity you may add.

Do all debit card transactions clear within 72 hours?
No. Some merchants will not send the final transaction through to us within the 72-hour time frame of the hold. In that case, the hold will drop off and funds will appear to be available again, however, the debit transaction still has to clear your account. Unfortunately, we have no control over how quickly merchants process their transactions.

Firstmark Overdraft Protection Guidelines:
As a service to members in good standing and to help you avoid the fees that may be charged by third parties for "bad" checks, we may, at our sole discretion, approve your reasonable overdrafts up to a dollar amount (inclusive of fees).  A fee will be charged for each Overdraft Protection overdraft item or Insufficient Funds item as outlined in our fee schedule.  You will be notified if an overdraft occurs, and you are expected to bring your account to a positive balance within 24 hours.  The total fees you have paid for NSF items (both paid and returned, for the current month and year-to-date) will be on your monthly statement.

The Overdraft Protection overdraft limit we offer may vary depending upon your account status and financial history.  If you have multiple checking accounts, your Overdraft Protection overdraft limit will be applied to your primary checking account only. 

Limits are subject to change daily without notification.  Therefore, just because we may pay your overdraft transaction today, does not guarantee that we will always pay your transaction when you do not have enough money in your account to cover the payment.  Your overdraft limit is not reflected in your balance provided at the ATM, by a teller, Online Banking, or SmartCall.

As always, we encourage you to manage your finances responsibly; however, as long as you maintain your account in good standing, we may, as a courtesy, approve your overdrafts within your current available Overdraft Protection overdraft limit.  However, we reserve the right to pay overdraft at our discretion.  If you do not have sufficient funds, we return the item, and you will be assessed the $28.00 Insufficient Funds Fee

Questions?
To learn more about how to avoid overdrafts, or to apply for overdraft protection, stop by your nearest branch or call (210) 442-0100.