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.