An overdraft is that situation when the money in your account isn’t enough to cover a transaction or withdrawal, but your bank steps in like a knight in shiny amour to save the day by allowing the transaction anyway, cool yeah? Well, what the bank just did was borrow you the extra cash needed for a price. Usually not for free as you’ll be required to pay back the sum you borrowed and an extra fee for the Overdraft Capital (although not applicable to all financial institutions) otherwise called “overdraft fee”.
Can You Overdraft Capital One Credit/Debit Card?
A simple answer to this is yes, you can overdraft Capital One credit/debit card. But you might want to stick around for clarification because it doesn’t sound as simple as a ”Yes” answer, as banks, including Capital One, don’t just make it glaring that they offer overdraft services. So you’re very right to ask if you can do an overdraft on a Capital One credit/debit card. Not to worry, we’ll get into the details now.
Just so you don’t mix things up, well briefly explain what credit cards and debit cards are, and try to differentiate them.
Debit cards are cards issued by a bank to a customer to make payments or withdraw cash from it. The money in this card is deposited into the account by the card user. So when that deposited money runs out, purchases or withdrawals using this card ordinarily should be impossible.
Credit cards are similar to debit cards but the money in the card is not deposited by the card user but by the bank or financial institution. That is, a particular amount of money say 30,000 dollars deposited into a credit card by the financial institution. If the card user reaches his limit being 30,000 dollars, transactions using this card shouldn’t be possible.
But with the policy of overdraft, a card (debit/credit) user, having reached his/her limit at the point of a transaction, can have access to the remaining balance needed to make the transaction go through.
For your Capital One debit card, an Overdraft can be done. Before you get excited, let us inform you that this is strictly at the discretion of the bank. Before now, you can enroll in the overdraft service on Capital One for a fee. This will give you access to overdraft whenever you need it. But at the moment, Capital one has stopped any kind of Overdraft fee. They run a program called the “No-Fee Overdraft” where the bank may authorize an overdraft or not. If the bank decides to authorize an Overdraft, you will get it for no extra fee but if they don’t, the transaction will be declined.
So you walk into a Nike Store picked a few pairs, and at the cashpoint, you’re told it’s 500 dollars in total. You have 450 dollars in your account. The transaction will fly if Capital One authorizes an Overdraft and you get your shoes but if they don’t, such transaction will be declined and you will need to pay the complete money before picking up your shoe. In this case, we advise that you stay within your budget
On the other hand, Overdraft on a Capital One credit card is different. Credit card users don’t use the word “Overdraft”, they use “Over-limit”. This is so because all credit card users are given access to a limited amount of money by their financial institution. If you reach that limit while trying to make a transaction, there is room for an Over-limit, Capital One no longer charges an Over-Limit fee.
Before now, Capital One will automatically enroll customers into the Over-limit programs that allowed the transaction even when a card user’s balance is not enough to permit the transaction. But the Credit CARD Act of 2009 ended this practice of automatically signing up users into the Over-limit program. The new policy became that users are given the option to opt-in to over-limit. The modus-operand is that without the consumer’s consent, they cannot charge Over-limit can not be done..
How to Activate No Fee Overdraft on Your Capital One Debit Card
To update the No fee Overdraft option on your capital debit card, do the following:
Step 1: Sign in to your online banking account.
Step 2: Click on your checking account,
Step 3: Select more services
Step 4: Select Overdraft settings and follow the prompt.
The same thing applies to a Capital One credit card Over-limit.
Please be informed that activating an Overdraft on your debit card or Over-limit is not a guarantee that Capital one will authorize an Overdraft or Over-limit. If the transaction is authorized, your purchase or withdrawal will be successful but if otherwise, the transaction will be denied or registered as unpaid.
Any alternative?
Yes, there’s an alternative way of enjoying overdraft without necessarily owing Capital one any time they lend you money to add to what you have on your card to aid a transaction. Or maybe you’re not comfortable with the uncertainty surrounding Overdraft and Over-limit on your Capital One debit or credit card, you can try the option of “free savings transfer overdraft protection”.
This option simply means that in an event of insufficient funds in your card Capital One can transfer money from your savings account linked to the card to allow the transaction. This is free but you must link the account. To link the account, sign in to your Capital One online banking, select account settings, Overdraft setting, and follow the prompt.
Conclusion
By and large, Overdraft/Over-limit can be done on your Capital one debit/credit card but this is not guaranteed. The bank decides whether to authorize overdraft or not. You’re at liberty to decide what overdraft options you want. There are no overdraft fees. It’s best to always check your account balance and synchronize it with your budget so you’re not stranded when you need to purchase above your account balance and Capital One declined overdraft on that transaction.
Frequently Asked Questions
1. Is Overdraft and Over-limit the same?
No. they are not. See the related paragraph above for clarification.
2. What happens when an Overdraft is unauthorized?
When an Overdraft is unauthorized by Capital One, the transaction is denied, and the user must make complete payment or forfeit the purchase. A safer met is to use free savings transfer Overdraft protection.
3. How much does an overdraft cost on my debit card?
Overdraft is free if authorized by your family financial institution. Before now it can run up to 35 dollars on a Capital One devote card. The new overdraft policy in Capital One, has made this service free.
