Chase Bank, also known as JPMorgan Chase Bank, is a prominent financial institution that plays a significant role in the United States banking industry. With its extensive history and strong presence, Chase Bank is considered one of the largest and most trusted banks in the country.
So naturally, financial institutions try to ensure the safety of their customers and also provide multiple features that can help them through their daily lives. One of these features that Chase offers is Overdraft Protection, letting account holders pay for their daily expenses if they do not have money in their checking account.
However, where does this money come from? And how much does it cost to activate this feature? Overdraft Protection indeed helps during an emergency, but there are things that you need to take into consideration.
What Does Overdraft Protection Provide?
First of all, being in overdraft refers to a situation in which an individual or business spends more money than what is available in their bank account. When a transaction exceeds the available balance, the account is said to be in overdraft.
When that happens, the bank may choose to cover the shortfall temporarily by allowing the transaction to go through. However, it results in a negative balance in the account and the overdrawn amount is typically subject to an overdraft fee, which is charged by the bank as a penalty for the insufficient funds.
In this kind of situation, Chase has you covered with Overdraft Protection. It allows customers to link their checking accounts to another account, such as a savings account or a credit line. All types of transactions are eligible for the feature, including your daily expenses.
So, if you do not have enough money to purchase something, Chase will use the available funds from your backup account to authorize or pay transactions, and no fee will be charged to your account. However, there is another service that differentiates from Overdraft Protection.
Regarding Chase’s Debit Card Coverage
This feature is also a lifesaver, but you cannot confuse it with Overdraft Protection. With Debit Card Coverage, if you do not have money in your account, Chase will authorize a payment, and charge you an overdraft.
But there is a limit that you need to stay on to not get overdraft fees. If your account balance is negative by more than $50 at the end of the business day, you need to make a deposit or transfer to avoid an overdraft fee of $34 per transaction that caused the overdraft.
You have until 11 PM ET (8 PM PT) on the following business day to deposit or transfer funds that will bring your account balance to negative $50 or less. It might sound confusing, but let’s see an example:
- Suppose it is Monday and you want to purchase something for $70, but you do not have that amount in your checking account, so you use Debit Card Coverage to pay for the transaction. After Chase checks the transaction and approves it in their nightly process, you will be charged with a $70 overdraft.
- So now you have until Tuesday 11 PM ET to pay at least $20 to bring your overdraft balance to $50 and not pay an overdraft fee. Unlike Overdraft Protection, you can only use this feature for everyday debit card transactions, like gasoline, groceries, and such.
There are some exceptions where you will not receive an overdraft fee:
- If your transaction is $5 or less.
- If your debit card transaction was authorized when there was a sufficient available balance in your account.
- If your debit card is declined.
Keep in mind that, if you have active Overdraft Protection active and there is sufficient money in the linked account, Chase will use the funds to pay for those transactions instead of charging an overdraft.
Now that you have heard both options, you may choose if you want to use one or both of these features. Activating and deactivating them is very simple, and it takes just a few minutes.
How to turn on Overdraft Protection
- Sign in to your Chase bank account through the mobile app.
- Tap on the checking account you want to activate Overdraft Protection.
- Scroll down until it says Overdraft Protection and tap it.
- Read the instructions and tap on Choose Account to pick the savings account that you want to link to your checking account.
- Read and agree with the terms and conditions of the service.
- Finally, tap on update protection and you are done.
How to turn off Overdraft Protection
If you are not interested in using this service or want to turn it off for some time, then follow steps one to three, and when you reach step four, instead of choosing a savings account, tap on none. With that, continue with the prompts until you are done.
Do not worry if you see the Overdraft Protection still on, the bank is still processing the deactivation of the service, so you will have to wait until it refreshes.
How to activate Debit Card Coverage
The process is similar to activating Overdraft Protection:
- Sign in to your Chase bank account through the mobile app.
- Tap on the checking account you want to activate Overdraft Protection.
- Scroll down until it says Debit Card Coverage and tap it.
- Read the instructions and tap on choose account to pick the checking account that you want to apply the service.
- Read and agree with the terms and conditions of the service.
- Finally, choose the coverage option and tap on update coverage.
How to deactivate Debit Card Coverage
It is the same process as deactivating the other service; when you reach the section to choose the account, select none and follow the prompts.
Use these Services in Case of an Emergency
When comparing Overdraft Protection and Debit Card Coverage, it would seem that the former has a slight advantage over the latter because of not charge any fees. However, the only way to get an overdraft fee is if you do not fulfil the payment in time.
Either way, you can activate both of these, but if there are funds in the savings account, Chase will prioritize Overdraft Protection. And in case you do not want to use these services, make sure to turn them off with the instructions explained above.
References
- Overdraft Protection. (2023, August 17th). In Chase. https://www.chase.com/personal/checking/overdraft-services/overdraft-protection
- Debit Card Coverage. (2023, August 17th). In Chase. https://www.chase.com/personal/checking/overdraft-services/debit-card-coverage