College Success, Financial Literacy, and Key Concepts for Students Practice Test

Overdraft protection is a service that prevents a transaction from being declined when your checking account balance isn’t enough by pulling funds from another source tied to your account, like a linked savings account or a line of credit. This means you can complete a purchase even if your balance is low. It doesn’t guarantee you’ll never overdraft, since coverage can vary and fees may apply. It also doesn’t automatically refund overdraft fees, and it isn’t the same as increasing your credit limit on the checking account.