Discover Unveils Overdraft Protection for Debit Card Customers

Discover debuted a new overdraft protection tool for its debit card customers.

Balance+ offers fee-free discretionary overdraft coverage for day-to-day debit card transactions, according to a Monday (July 8) press release.

“With many Americans continuing to live paycheck-to-paycheck, this offering highlights Discover’s continued efforts to help address overdraft fees — a key customer pain point — and allows customers to seamlessly manage their money without the stress of not being able to cover everyday purchases,” the release said.

Balance+ lets Discover’s Cashback Debit account holders overdraw their checking account up to $200 on debit card purchases without accruing fees, per the release.

The program is open to accounts in good standing with a balance of greater than zero, and account holders need to have gotten at least one qualifying direct deposit of more than $200 each month for the last two calendar months, according to the release.

Balance+ joins Discover’s existing overdraft protection offerings for checks, online bill payments and ACH transfers initiated at another bank, the release said.

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

PYMNTS Intelligence found that consumers living paycheck to paycheck were six times more likely to have tried to make a transaction without sufficient funds in the past year, with more than two-thirds of those transactions leading to overdraft fees.

Separately, many paycheck-to-paycheck consumers are cutting back on nice-to-have items.

The “ Why One-Third of High Earners Live Paycheck to Paycheck ” edition of the PYMNTS Intelligence series “New Reality Check: The Paycheck-to-Paycheck Report” showed that 69% of people earning less than $50,000 per year and 66% of those who earn $50,000 to $100,000 annually have reduced nonessential spending due to retail product price increases.

Meanwhile, the “ Emergency Expenses Break the Bank for Paycheck-to-Paycheck Consumers ” edition of the New Reality Check report revealed that roughly 1 in 4 consumers living paycheck to paycheck with issues paying bills faced unexpectedly high bills in the prior three months, while 18% experienced unexpected healthcare-related expenses.