Recently, I had a transaction that exceeded the dollar amount available in my Chase checking account. I remember a while back I had opted out of what is called Chase Debit Card Overdraft Coverage. Essentially what I understand the coverage to be is that Chase will cover any charges above your balance if you ever happen to overdraw from it in the form of a purchase or withdrawal. They will allow you a certain period of time to replenish your funds. Alternatively you can opt out of this option and have them deny any transaction that where you don’t have sufficient funds. Below is the option text found in their website.
Select “Yes” if you want Chase to authorize and pay overdrafts on your everyday debit card transactions. Your everyday debit card purchases may be approved at Chase’s discretion, when you don’t have sufficient available funds. Standard overdraft fees may apply. Note: By choosing “Yes,” your account(s) will reflect your decision effective immediately.
Select “No” if you do not want Chase to authorize and pay overdrafts on your everyday debit card transactions. Your everyday debit card purchases will be declined if you don’t have sufficient funds. Accordingly, you will not be charged insufficient funds/overdraft fees for everyday debit card transactions. Note: By choosing “No,” your account(s) will reflect your decision on or before the second business day after your decision has been submitted.
Personally, I opted out since you can still be charged overdraft fees when and if they permit for transactions to occur. I’ve had experiences in the past where unauthorized recurring bills occurred so I was much more comfortable with opting out since they will decline transactions exceeding my available funds. That is much safer in my opinion and prevents large unauthorized charges from occurring.
It turns out Chase is determined to provide me with some form of overdraft coverage/protection. Recently I had a credit to my account of $50.00 noting it as an ODP transaction from my credit card. They took $50.00 from my credit card to cover a transaction that in my opinion should have been denied in the first place.
I wrote them, asked them to reverse the transaction since the $50.00 taken from my credit card would be considered a cash advance and I would have to pay the ridiculous interest rate of 20+ percent on those $50.00. Granted, it may not be more than a few bucks but if this happens in the future on a larger scale, I don’t want to be stuck with paying high interest rates. As I said, I wrote them and asked them to reverse this transaction. Their reply is as follows:Date: 07-15-2010 23:40:52 From: Chase Online Subject: Re: Account Inquiry Message: Dear Oscar Valles, Thank you for contacting the Internet Service Center. We apologize for the inconvenience that this may have caused you. Our record indicates that you opted out for the Debit Card Overdraft Coverage (DCOC) but not the Overdraft Protection (ODP). When you opted out to the DCOC, everyday debit card transactions will be declined once both the checking account and your ODP account (the credit card in your case) has no funds left. Please note that without the ODP on your account, you could have been charged $68.00 for the fees alone on 07/14/2010. We will be unable to cancel the ODP transfer; however, if you still like to proceed with the cancellation of the overdraft protection, please respond to this message to prevent it from happening in the future. If you have any questions or require further assistance, please e-mail us via the Secure Message Center or contact our Internet Service Center at 1-877-242-7372. Thank you, Harvie Puli Internet Service Center
—end of message—
That is something that is still unclear to me. How is it that I can incur up to $68.00 in fees if they are supposed to deny those types of transactions and not have me, the customer, incur non-sufficient funds or overdraft fees? Either this rep does not know what he is talking about or the bank policies are a false. My intention is to call and find a definitive answer. Once I do, I’ll update this post and let you all know.
UPDATE – With regards to the paragraph above, you can incur over draft fees if you pay something by check and you don’t have sufficient funds in your account, or if you schedule a bill payment online via your Chase checking account and you don’t have sufficient funds when the payment goes through. Under that scenario, you will get charged NSF fees and the like. Otherwise, if you pay with your debit card and you don’t have sufficient funds, the transaction should be denied. No fees should be incurred.
Recently I asked for them to remove all overdraft protection (thus preventing transfers from any other account) After my request was processed, they sent me a 10 page document outlining fees, protection and other information (which I’ll scan and upload later).