Overdraft Dilemma: What Happens If I Overdraw My BMO Harris Account?
November 18, 2023 by JoyAnswer.org, Category : Finance
What happens if I overdraw my BMO Harris account? Understand the consequences of overdrawing your BMO Harris account. This guide provides insights into the potential fees and repercussions associated with overdrafts.
What happens if I overdraw my BMO Harris account?
If you overdraw your BMO Harris account, several things might occur, and the specific actions can depend on the bank's policies and your account type. Here are potential consequences:
Overdraft Fees:
- Fee Charged: BMO Harris might charge an overdraft fee for each transaction that exceeds your available balance. This fee can vary based on the bank's policies and the type of account you have.
Negative Balance:
- Negative Balance: Your account may have a negative balance, representing the amount by which you've overdrafted. This negative balance includes the amount of the overdraft plus any associated fees.
Impact on Transactions:
- Rejected Transactions: Future transactions, such as purchases or withdrawals, may be declined if your account remains in a negative balance state.
Repayment Requirements:
- Repayment Obligation: You're required to bring your account back to a positive balance. This typically involves depositing enough money to cover the negative balance and any associated fees.
Communication from the Bank:
- Notifications: BMO Harris might notify you via email, mail, or phone regarding the overdraft situation and the necessary actions to resolve it.
Addressing the Overdraft:
- Options to Resolve: You can deposit money into the account to cover the negative balance and fees. Some banks might offer overdraft protection or overdraft lines of credit as options to cover overdrafts, but these services might come with their own fees.
Continuous Overdrafts:
- Repeated Overdrafts: Continuous overdrafts without resolution can lead to further fees, account restrictions, or potentially account closure.
It's essential to check your account regularly to monitor balances, transactions, and any potential overdraft situations. Contacting BMO Harris directly for specific information about your account, their overdraft policies, and available solutions is advisable if you're concerned about potential overdrafts or have already overdrafted your account.
1. Consequences of Overdrawing a BMO Harris Account
Overdrawing your BMO Harris account can lead to several negative consequences, including:
Overdraft Fees: BMO Harris charges an overdraft fee of $15 for each item paid when your account is overdrawn more than $50. You can be charged up to three overdraft fees per day, even if you attempt transactions that would overdraw your account more than three times in a day.
Late Fees: If you allow your overdraft to remain unpaid for an extended period, you may incur late fees. These fees are typically added to your account balance each month.
Negative Credit Reporting: If your overdraft remains unpaid for a prolonged period, BMO Harris may report the negative balance to credit bureaus. This can negatively impact your credit score and make it more difficult to obtain loans or other credit products in the future.
Account Closure: In extreme cases, BMO Harris may close your account if you have a history of overdrafts or if you fail to repay your overdraft balance.
2. How BMO Harris Handles Overdraft Situations
BMO Harris has several policies in place to manage overdraft situations. These policies include:
Automated Declines: By default, BMO Harris will automatically decline ATM and everyday debit card transactions that would overdraw your account. This helps to prevent you from incurring additional overdraft fees.
Overdraft Protection: BMO Harris offers overdraft protection programs that can help to cover overdrafts by drawing from a linked savings account or line of credit. However, these programs typically come with additional fees.
Overdraft Notifications: BMO Harris will send you notifications when your account is overdrawn to help you manage your finances and avoid further fees.
3. Fees and Penalties Associated with Overdrawing a BMO Harris Account
As mentioned earlier, BMO Harris charges an overdraft fee of $15 for each item paid when your account is overdrawn more than $50. You can be charged up to three overdraft fees per day. Additionally, you may be charged late fees if you allow your overdraft to remain unpaid for an extended period.
To avoid these fees and penalties, it's important to manage your finances carefully and avoid overdrawing your account whenever possible. If you do overdraw your account, contact BMO Harris customer service to discuss your options and make arrangements to repay your balance.
