Is Overdraft Line of Credit* for Me?

Posted August 3rd, 2018

*Note - we changed the name of Overdraft Line of Credit (ODLOC) to Personal Line of Credit (PLOC) to better describe its many uses.

If you're anything like me, you've heard of our Overdraft Line of Credit and immediately assumed you didn't need it. The word 'overdraft' has such a negative feeling to it. You might have asked yourself, "why would need overdraft protection if I never overdraw my account?" While that's totally valid, our Overdraft Line of Credit (ODLOC) is so much more than overdraft protection.

What is ODLOC?

Overdraft Line of Credit is simply an extra layer of protection. You can never be too cautious, right? Even if you very rarely overdraw your account, ODLOC is there in case of emergency. Even the most money-conscious people can make mistakes. We want to make sure those mistakes don't cost you.

How does it work?

ODLOC can be added to your checking account at no cost to you. You only pay for it when you use it, and even then the $5 fee is waived if you are Emerald Checking level 4. The service is available with credit limits ranging from $250-$2,500. If your account gets overdrawn, money is automatically transferred in $100 increments. If you know you will need to use the OLOC, you can preemptively transfer it in mobile banking. You can even withdraw that money once it's transferred.

In some cases, the service can work as a payday loan. If you have something you want to buy and don't have the money right now, but know you'll have it soon, ODLOC can come in handy. You simply transfer the money, purchase whatever you need to purchase (like a plan ticket or a pay off a hospital bill), then pay it back when you get paid or pay a little bit each month.

Once the money is transferred (manually or automatically), payment is transferred from primary checking on the first of every month. Our ODLOC has a 18% annual percentage rate.

Why use it?

ODLOC can come in really handy in emergency situations. Even if you think you'll never use it, you'll be grateful if you do. And if you don't ever need it, which would be awesome, you aren't out anything! ODLOC can help cover expenses so you don't bounce checks, miss payments, or have your debit card denied. All of those incidents can be costly and we want to save you from those unnecessary fees.

"But does it really do that much for me?" you may ask. Well, look at this way. Say you're balance is low and you have a few outstanding transactions you totally forgot about. Those charges go through and send you negative. Each charge is counted as an overdraft, no matter how small. So if you have 3 $5 charges go through, you are only overdrawn by $15. However, you are charged 3 times at $27 each, which is a lot more than the original $15. If you have OLOC though, you aren't charged for the overdrafts. Instead, $100 is transferred to that account to cover costs and, if you are Emerald Level 3 or lower, you are charged $5. Then, you can repay that $100 the next month with a small interest rate.

I'm in! How do I sign up?

If you're interested or want to learn more, stop by one of our locations, give us a call at 217.875.2301, or use our live chat feature. We can get you signed up right away!

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