Does your overdraft program spread joy?

By John M. Floyd & Associates (JMFA)

This time of year offers up a special sort of chaos for many: lots of celebrating with friends and family, along with lots of spending in a short amount of time. Believe it or not, a well-managed overdraft program can help spread holiday joy. Does yours?

Nearly 75 percent of Americans say they often fail to budget adequately for the holidays, and last year the average holiday debt totaled $1,054. It’s just a fact: it can be difficult to keep up with the many payments made at various locations at this time of year. Your account holders may think they’ve got an expense covered. But if they forgot about a previous purchase they made in the midst of a hectic workweek and festive activities, it could create a not-so-positive experience for them.

Undisclosed, Algorithm-Based Overdraft: An undisclosed overdraft program can steal joy left and right—potentially making a negative impact in terms of service.

Bills to pay? Not knowing their limits, account holders can’t rely on a safety net if they need to pay an essential bill before a paycheck clears.

Unexpected expenses? The holidays are filled with unexpected expenses. If an account holder makes an error in budgeting and accidentally overdraws his or her account on a non-essential purchase, they may be frustrated to see additional fees assessed.

And what if account holders want to know why their limit has changed since the last time they overdrew their account? They’ll likely be confused and irritated at the explanation if it isn’t definitive or clear.

There’s got to be a better way to help your account holders. Offering them the choice of having a transaction covered  for a fully disclosed fee provides a service that they can rely on.

Fully disclosed overdraft services can empower account holders with knowledge about the limits and fees for the service should they need help making ends meet or covering unexpected expenses. Though money may be tight this time of year, account holders who can make informed decisions will likely feel less stressed and be able to embrace the joyfulness of the season.

When account holders know their overdraft limit, realistic and predictable expectations are set early on. They can better weigh the urgency of the situation against the fee and decide what to do from there. And instead of being over penalized for making a mistake and getting assessed unexpected fees, they know upfront what will happen if they overdraw their account.

With a fully disclosed overdraft service, account holders will appreciate knowing they have options if they choose to use the service as a safety net—especially during a time when unexpected expenses may come up.

The clear choice for year-round cheer: a fully disclosed overdraft program. How does your overdraft service measure up? If you’re not feeling the joy in your current program, learn more about JMFA.