What is Overdraft Protection?

Need to know "what is overdraft protection"? It’s a simple enough idea, but whether or not you need it is another matter.

A Simple Overdraft Protection Definition

Overdraft protection is an often overlooked feature offered by banks aimed at keeping your checking account from going into its overdraft and incurring a fee. If you try to pay for something without having enough money in your checking account, overdraft protection links to your savings account, credit card, or other line of credit and uses that account to pay for the transactions. 

Instead of being turned down at the till or incurring a fee just for inadvertently dipping into your overdraft, the cost is automatically covered.

The Pros and Cons of Overdraft Protection

Overdraft protection can be handy if you don’t abuse it. Most people don’t keep a huge amount of money in their checking account, so several bills or payments coming in at once can catch you off guard and send your account into the overdraft. With overdraft protection, that money comes straight out of another account. 

The problem is that, in some cases, overdraft protection can put you in a worse financial situation. If it overdrafts onto your credit card and you miss the credit card payment, for example, your credit score will be damaged. You should only take advantage of overdraft protection if you know you’ll use it properly.

How Does Overdraft Protection Work With Town and Country Bank and Peoples Prosperity Bank?

We offer email alerts and mobile banking to help make sure you don’t go close to your overdraft. If you do, the following overdraft protection services are available: 

• Savings Link: Sets up an automated transfer between checking accounts and other qualifying accounts. There’s no fee, and you get up to 6 transfers per statement period.
• Convenience Line: Provides advances when checking account transactions exceed the balance. There’s a $32.00 annual fee and 17.99% interest on advances.

Learn More or Set Up Overdraft Protection Today

To find out more about overdraft protection fees or the service itself, simply visit your local branch of Town and Country Bank or Peoples Prosperity Bank. We have branches convenient for residents in Edwardsville, Fairview Heights, Bloomington, Decatur, and all across central Illinois.