If I opted into debit overdraft, can the bank/credit union still decline a debit purchase if it would overdraw my account?

By opting into debit overdraft, you are allowing the bank to charge you a fee to pay for a purchase that would cause an overdraft, but the bank is not required to honor the debit transaction that would result in an overdraft.

Banking institutions can only charge a fee to pay your debit purchase that would cause an overdraft to your account if you have opted into debit overdraft coverage. Otherwise, they may decline the purchase. Opting in allows the bank to pay the debit charge, but if they cover a transaction when you don’t have enough money in your account, they will charge you an overdraft fee.

You can protect yourself from these fees by linking a credit card, overdraft line of credit, or another bank account to your debit account, sometimes called an “overdraft protection plan.” If you make a purchase that would cause an overdraft, it will automatically take the funds out of your linked account to cover the difference. There may also be a fee for this, but it’s usually much lower than the overdraft fee.

Also, many banking institutions and mobile banking service companies are reducing or eliminating overdraft fees due to competition. Check your bank’s overdraft policy and whether you will be charged for overdraft fees if they cover your purchase, as they are not required to do so.

Before opting into debit overdraft protection, make sure you understand what fees you may be responsible for and your options.

Learn how to avoid or minimize overdraft fees.