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Overdraft is the word. The bank agrees to extend credit to cover a check written for more funsd than you have in the bank. In effect, they are making a loan to you.

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11y ago
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12y ago

overdraft loan

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Q: Suppose your bank honors a check for which you don't have sufficient funds in your checking account This action means that youve arranged beforehand for aan?
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Suppose your bank honors a check for which you don't have sufficient funds in your checking account This action means that you've arranged beforehand for a/an?

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Suppose your bank honors a check for which you don't have sufficient funds in your checking account This action means that you've arranged beforehand for aSuppose your bank honors a check for which yo?

Many bank accounts are combined with "overdraft protection"; if you write a check for more money than is available in your account, the bank will pay the check on the assumption that you will be depositing more money in a few days anyway. There's generally a fee for this service, which can be substantial; 20-40 dollars per overdraft. In some cases, if you have a credit card with this bank, the bank can pay the check and automatically do a "cash advance" on your credit card. With my bank, the cash advance is in increments of $100, so if I write a check for $5 more than I have in my account, it transfers $100 from my credit card to my checking account. I'm fortunate in that my bank doesn't charge a cash advance fee for each transaction.


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