Can you overdraft a higher one card

Paying With Checks. Using a Debit Card. Best Checking Accounts. Business Checking Accounts. Banking Checking Accounts. Be sure to read the fine print before signing up for overdraft protection, as fees and terms vary from one bank to another.

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Related Articles. Partner Links. Related Terms How Overdraft Provides Protection An overdraft occurs when there isn't enough money in an account for a transaction or withdrawal, but the bank covers the transaction anyway. How Does a Checking Account Work?

A checking account is a highly liquid deposit account held at a financial institution that allows deposits and withdrawals. Why Overdraft Protection Matters Overdraft protection is a fund transfer or loan that banks offer to customers to cover checks or debits larger than their account balances, so as to avoid nonsufficient funds fees. Read about NSF fees and how to avoid them. Linked Savings Account A linked savings account is a savings account that is connected to another type of account like a checking account.

The Basics of Debit Cards A debit card lets consumers pay for purchases by deducting money from their checking account. Learn how debit cards work, their fees, and pros and cons. Investopedia is part of the Dotdash publishing family. There are two types of overdraft: arranged and unarranged.

We explain more here: How do overdrafts work? An overdraft is suitable for cash purchases and cash withdrawals. It can also be used to pay direct debits and standing orders, unlike credit cards.

If you have already got a current account, access to an overdraft can be approved on the same day you apply or the next day.

If you are applying for a credit card, bear in mind that after being accepted, you will have to wait to receive the card and PIN in the post. This typically takes up to a week. So you can get hold of the money more quickly through an overdraft.

Neither overdrafts nor credit cards have a fixed repayment period. You can use the debt for as long as you like. If you would rather repay the debt over a set period, it may be worth considering a personal loan. Interest rates are typically much lower on a personal loan — although repayment terms tend to be much stricter.

Find out more: Read our guide to budgeting. Both will appear on your credit report. But neither will negatively affect your credit score as long as you use them sensibly and keep up with any necessary repayments. Credit scores: everything you need to know. It can be useful as a back-up. Find out the best current accounts according to our ratings. Receive regular articles and guides from our experts to help you make smarter financial decisions.

By entering your details, you acknowledge that your information will be used in accordance with our privacy policy. You can unsubscribe at any time. Searching Money Mentor. Enroll Now. Overdraft Protection We understand that life is busy. Forgetting to record a check or debit can happen to anyone, no matter how carefully you manage your finances. An authorized payment could fall due a day or two before you have the funds to cover it, or a check you've deposited may take longer than anticipated to clear through to your account.

Every consumer checking account may qualify for Overdraft Privilege. With Overdraft Privilege, we consider payment of overdrafts instead of automatically returning the check. As a discretionary service, Overdraft Privilege is subject to approval by the bank and is only in effect after an initial period.