Can You Overdraft a Payroll Card?

open Posted:   June 07, 2018

can you overdraft a payroll card

Simply put: No, you cannot overdraft a payroll card. You can, however, put your payroll card account into the negative. When a SOLE paycard account goes into the negative, it does not accrue interest or charge daily fees while the account is in the negative. Instead, the account reconciles once sufficient funds are deposited into the account.   

Now, let’s break it down. Although some payroll card companies charge overdraft-like fees, SOLE does not charge overdraft fees. However, there are still a few things to keep an eye out for.

Declined transaction fee: A $0.50 declined transaction fee is charged to the cardholder when there are not sufficient funds in the account to cover the amount of the purchase. If a declined transaction fee has put the paycard account into the negative, the account will be reconciled once sufficient funds are deposited into the payroll card account. 

Tip: Check the balance of a SOLE Paycard account by logging onto the mobile app or website. This ensures there are sufficient funds on the paycard to cover all purchases made.

Merchant force post: Occasionally (and very rarely), a merchant will take too long to reconcile a payment. When this happens, it can appear that the paycard account has more money it than it actually does. This is because the merchant has not yet collected their money from the payroll card account.

Check out this example scenario to better understand what a force post is:

Bob goes to the grocery store and buys $300 in groceries. The grocery store places a three-day authorization hold on his account when his balance is $450. The transaction goes through and it adjusts the balance to $150. Bob doesn't pay attention to his balances for the next few days and spends $140, leaving him with $10. On the fourth day, the authorization hold expires but the grocery store hasn't collected the funds from Bob’s account yet. Bob's balance now shows $310. He says "great!" and goes and buys a $310 lawnmower. Then, the grocery store decides to reconcile their payments and finally collect the original $300. Bob’s account now negative $300.

In this scenario, the SOLE Paycard account would reconcile itself once sufficient funds have been deposited into the account. There would be no fees, interest, or penalties. If this scenario were to happen to an account at a different financial institution, the account could be hit with expensive overdraft fees – some totaling over $35, and often accruing additional daily interest charges!

Tip: In instances where internet access is unavailable cardholders can call into SOLE’s automated system at 1-800-457-5809 and select option two to listen to the balance of the paycard account for free.