Discover offers fee-free overdraft protection

Discover Bank is now offering its Cashback Debit customers more spending power. The company just launched fee-free overdraft protection on its debit cards. Called Balance+, the new feature is available for everyday debit card transactions made by Cashback Debit customers.

A 2023 survey conducted by Payroll.org revealed that that 78 percent of Americans live paycheck to paycheck. This has led many banks and debit card companies to offer fee-free overdraft protection.

Discover said it wants to target these customers by helping them avoid overdraft fees and allowing them to seamlessly manage their money without the stress of not being able to cover everyday purchases. It's similar to offerings advertised by the online banking service Chime and Green Dot Bank, both of which will spot customers up to $200 with no overdraft fees.

"With Balance+ we are giving our customer peace of mind that Discover has their back when they use their debit card for their everyday necessities," said Ram Subramanian, vice president and chief marketing officer at Discover Bank. "This is a natural extension of our commitment of offering the most rewarding banking experience without having to worry if you make a mistake."

With Balance+, Cashback Debit accountholders can overdraw their checking accounts up to $200 fee-free when using their debit cards to make purchases. To qualify, an account must be in good standing with a balance greater than $0, and accountholders must have received at least one qualifying direct deposit of at least $200 a month for the previous two calendar months.

Balance+ complements Discover Bank's existing overdraft coverages, including fee-free overdraft protection, which automatically transfers money from a linked Discover account to cover checks, online bill payments and ACH transfers initiated at another bank that result in overdrafts. Cashback Debit customers can enroll in both Balance+ and the more traditional overdraft protection Discover Bank offers, the company said.

Building on existing Cashback Debit

Other enhancement to Cashback Debit, in addition to Balance+, recently announced by Discover include:

• Add Cash, which offers contactless debit card users the ability to add money to their accounts at any Walmart location throughout the U.S., fee free.

• Direct Deposit Switch, which allows customers to seamlessly setup or switch their payroll direct deposit instructions, securely, using their Discover mobile app or through their online portal, providing access to Early Pay (with payroll direct deposit transactions available two days earlier than paper checks).

• Secure Account Linking, which gives customers a seamless way to link external accounts to their Discover Bank accounts.

These all build on existing benefits of Cashback Debit, including 1 percent cashback on up to $3,000 in debit card purchases monthly, no monthly maintenance fees, fraud protection and fee free access to over 60,000 ATMs nationwide.

"Cashback Debit offers consumers a wide range of benefits and is one of the only checking accounts to offer cash back rewards," Subramanian said, adding that the bank's goal is "to provide straightforward and meaningful benefits that put the consumer in control of their finances."

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.