With Carefree Line of Credit overdraft protection …
- Your credit line is activated whenever your account balance falls below $0.
- The interest rate is 18.00% APR.
- There is an annual fee of $24.00.
- You can repay the outstanding balance monthly or all at once.
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What Is an Overdraft Line of Credit?
Imagine this: You paid your bills three days ago and don’t have a lot left until payday. You checked your balance this morning and have enough to make a grocery store trip after work. But what you didn’t realize is that the power company hasn’t cashed your check yet. Once they do, your account is in the negative.
That’s when Carefree Line of Credit kicks in. Both transactions go through, instead of getting your debit card declined at the store (embarrassing and inconvenient) or bouncing the check (triggering bank overdraft fees and late fees from the power company).
How Overdraft Lines of Credit Work
You’ll get a line of credit—a type of loan that lets you borrow up to a certain limit and pay interest only on the amount you use. This is linked to your checking account, so money is automatically transferred over to cover the shortfall.
Every month, the minimum payment will be taken from your checking account. But don’t worry, you can always pay more or pay off the whole balance anytime without any penalties.
What Happens When You Use Your Carefree Line of Credit?
If you tap into your overdraft line of credit, here’s what you can expect:
- Automatic Transfers: Money will move from your line of credit to your checking account in $50 chunks to cover any overdrafts.
- Monthly Statements: You’ll receive a monthly statement that breaks down your loan activity, including any charges and repayments.
- Automatic Payments: A minimum payment will be automatically deducted from your checking account. This will be the greater of $15 or 4% of your outstanding balance.
- Flexibility: You can make extra payments or pay off the entire balance whenever you want, without any extra fees.
Other Information about the Carefree Line of Credit
Here are some additional key features:
- Annual Fee: There’s a $24 annual fee that will be deducted from your account.
- Minimum Line: The smallest credit line available is $1,000.
- APR: The annual percentage rate is 18.00%.
- Financial Statement: If you need more than $5,000, you’ll need to provide a personal financial statement.
- Joint Accounts: Everyone on the checking account must also be on the Carefree line of credit. If you add someone new to your account, you’ll need to submit a new application to include them.
- *Subject to credit approval