Understanding Overdraft Protection & Courtesy Pay

Know your options before you ever need them.
 
How It Works

Ever check your account and wonder... “What is this fee?”, or "How did I overdraw?"
 
Or maybe you've heard terms like Overdraft Protection and Courtesy Pay and thought..."Aren't those the same thing?"
 
Not quite. Let's break it down in plain English, so you know what these services are, when they can help, and, most importantly, how to avoid paying unnecessary fees.
 

Overdraft Protection

Overdraft Protection uses your own money.
 
If your checking account doesn't have enough to cover an ACH transaction or check that you have written, Automatic Overdraft Protection can automatically transfer available funds from another eligible CSE account you've linked to your checking account to cover a transaction, i.e., your Regular Savings or another Special Savings account.
 
Even better? There is no fee when the system automatically makes the transfer. It's simply using money you already have at CSE to help prevent your Checking account from going negative.
 
One important thing to know: Overdraft Protection isn't automatically turned on. You'll need to opt in and choose which eligible CSE account you'd like linked for transfers. You can get it set up by giving us a call or stopping into a branch.
 
FeatureOverdraft Protection
Use your own money?✅ Yes
Helps avoid returned checks or ACH transactions?✅ Yes
Fee charged?❌ No
Transactions eligible to be covered by Overdraft Protection?
  • Checks you have written
  • ACH transactions
Best used as...Everyday backup
 

Courtesy Pay

Courtesy Pay works a little differently. If you don't have enough money in your Checking account, and there aren't enough available funds in an account linked through Automatic Overdraft Protection, Courtesy Pay may allow CSE to cover certain transactions for you, up to an approved limit of $400.
 
Think of Courtesy Pay like an emergency backup. It's there to help when life happens and you need a transaction to go through, but it's not intended to become part of your regular monthly budget.
Here's what you should know:
  • There's no cost to have Courtesy Pay available. If you use it, however, a $25 overdraft fee is charged for each item CSE pays through Courtesy Pay. So, if you have multiple transactions trying to clear your account that would take it negative (or, while your account is currently in the negative), each transaction will have its own $25 fee.
  • Not every account is eligible. Courtesy Pay is available on eligible Checking accounts that remain in good standing.
  • Debit card and ATM transactions require you to opt in. There's no application or credit check, and you can opt out at any time.
  • You'll need to repay what you use. Your account must be brought back to a positive balance within 30 calendar days and remain positive for at least one full business day. Remember, any deposits made while your account is negative will first go toward repaying the overdrawn balance and associated fees.
 
FeatureCourtesy Pay
Use your own money?❌ No
Helps avoid declined transactions?✅ Yes
Fee charged?$25 per item
Transactions eligible to be covered by Courtesy Pay?
  • Checks you have written
  • ACH Transactions
  • Debit & ATM transactions (Only if your debit card is Opted In)
Best used as...Emergencies only
 
Not sure if you have Courtesy Pay or if your account is eligible? Give us a call or stop into a CSE office. We can review your account, explain your options, and help you decide whether Courtesy Pay makes sense for you.
Button: More Information on CP Here : "What You Need to Know About Overdrafts and Overdraft Fees"
 
 
Remember Courtesy Pay Is a Safety Net—Not a Spending Plan
We've all been there. Your paycheck hits tomorrow… but today your automatic insurance payment comes through. Or your child needs medicine. Or your car decides today is the day it needs new brakes.
 
Courtesy Pay can help during those unexpected moments. But using it regularly can become expensive.
 
For example:
  • Five transactions in one month that tap into Courtesy Pay could mean $125 in fees.
  • That's money most of us would rather put toward groceries, savings, or paying down debt.
  • The goal is to use Courtesy Pay as an occasional backup, not something you rely on every payday.
 
 
How to Avoid Courtesy Pay Fees
 
#1 Keep an Eye on Your Available Balance - One of the biggest causes of overdrafts is misunderstanding the difference between two balances.
  • Current Balance: This is the money currently in your account.
  • Available Balance: This is what you actually have available to spend after pending purchases, debit card authorizations, or holds are taken into account.
When deciding whether you have enough money to make a purchase...Always look at your Available Balance.
 
#2 Watch for Pending Transactions - Just because a purchase hasn't officially posted yet doesn't mean the money is still available.
Examples include:
  • Restaurants
  • Gas stations
  • Hotels
  • Online shopping
  • Subscription renewals
These pending transactions reduce your Available Balance, even if they haven't officially cleared yet.
 
#3 Set Up Digital Banking Alerts - One of the easiest ways to stay ahead? Let technology help.
With digital banking, you can set up alerts for things like:
  • Low balances
  • Large purchases
  • Deposits
  • Account activity
 
#4 Check Your Account Regularly - Life gets busy. Even checking your account for a minute or two every day can help you catch pending purchases before they become overdrafts.
 
Already Stuck in the Courtesy Pay Cycle?
If it feels like every paycheck goes toward covering yesterday's overdraft... you're not alone. Many people find themselves caught in this cycle. The important thing is knowing there are options.
 
Depending on your situation, you may benefit from:
  • Reviewing your monthly budget
  • Adjusting automatic payment dates
  • Setting up balance alerts
  • Exploring overdraft protection options
  • Speaking with a member service representative about your account
  • Meeting with a financial counselor to create a plan
Sometimes a few small changes are enough to break the cycle.
 
If you want a little help exploring your options, check out CSE’s FREE financial counseling services.
Learn More

Understanding Your Options Before You Need Them
Overdraft Protection and Courtesy Pay are designed to provide peace of mind when life throws you a curveball, but they're not meant to replace healthy financial habits.
 
The more you understand your options, the more control you'll have over your money.
 
The best time to learn about overdraft services is before an overdraft happens. Understanding how your account works today can help you avoid unnecessary fees tomorrow.
 
And if you ever have questions, don't wait until after an overdraft happens. Our team is here to help you understand your account, explore your options, and build a plan that works for you.