You can use Cash App for quick peer-to-peer payments, in-store and online purchases but can your overdraft Cash App to buy something when there are insufficient funds in your account? Let me solve this mystery for you today!
Can You Overdraft Cash App Account or Prepaid Card?
The straightforward answer to this question is no but there are workarounds that make things interesting.
First of all, Cash App does not host a dedicated “overdraft” option. This means you can not overdraw funds from the app or make a transfer when the account balance is insufficient.
However, some users have reported that their Cash app balance went negative accidentally when they paid at a gas station not knowing that the money in account was not sufficient.
Other than that, although rarely, Cash App may deduct funds from the account automatically if the recipient reports that the transfer was made by mistake. This can also leave your account with a negative balance if you had spent a portion of that money before the refund is processed.
Can You Overdraft Cash App Card at An ATM?
Cash App card works much like a debit card. This means you can use it only to withdraw the funds that are already available in your account. It will not allow you to overdraft during an ATM withdrawal.
If you request funds at an ATM that exceed the amount you have in Cash App account, the transaction will not be processed.
Moreover, Cash App prepaid card has certain limitations you need to keep in mind. It does not permit a user to withdraw more than $1000 per day, $1000 per week, and $1000 per transaction. This applies to both, ATM withdrawals and with POS devices.
There is a $2 fee for Cash App ATM withdrawal. You can avoid this with regular, $300 direct deposits in your account. Additionally, ATM operator may charge you extra fees for the service.
Can You Overdraft Cash App On Purpose?
The app allows for overdrafts but you will not see a dedicated overdraft button to help you with this. Your balance can go in negative on Cash App unintentionally when secondary charges get deducted that you were not aware of or when a delayed transaction takes place.
Let me explain these situation to you in simpler words!
1. Delayed Transactions
Although peer-to-peer payment apps like Cash App guarantee quick transfers, some transactions are processed with a delay perhaps because of the retailer you bought from.
Let’s say you made a purchase online and requested for shipping of the product. Then you continued to use Cash App balance for other transfers and purchases. The retailer processed your payment after shipping was confirmed but you had already spent the balance. Now when the funds for previous purchase are deducted, you will be left with a negative balance.
2. Secondary Charges
Late charges can also result in negative balance. If you have insufficient funds in the account to cover for the transactions when the deduction happens, it will go into negative.
What Are Cash App Overdraft Charges?
There are no overdraft charges with Cash App. When you overdraw funds from your account and it is left with a negative balance, you only need to pay off that balance to continue using the app for transactions in the future.
How Can You Avoid Cash App Overdrafts?
There is no way that you can overdraft Cash app on purpose unless you opt for the loan program that I will discuss in more detail below.
Nonetheless, it is a good idea to have a solid backup plan when it comes to few extra dollars in your account before the payday arrives.
The best way to avoid Cash app overdrafts is to keep a thorough check on your spendings and to never exceed the amount available as Cash App balance.
It will also help you download and sign up with additional cash advance apps like Chime or PockBox to rely on in times of need.
How To Borrow Money From Cash App?
Cash App has recently introduced the feature of borrowing money but there is an eligibility criteria you need to watch out for.
Cash App loan is only offered to users who are getting regular direct deposits into their Cash App accounts of at least $1,000 per month.
There are no fees to borrow with Cash App as long as you are getting $300 direct deposits or more. Moreover, you must have a stable Cash App account history in order to get a loan.
Even if you fulfil all the requirements, Cash App still reserved the right to turn down your loan request. These are just some factors that increase the chances of successfully obtaining the loan but do not guarantee it.
Now we get to the good part i.e. how to apply for a loan with Cash App. Let me show you how this is done through an easy, step-by-step guide.
- Open your Cash app account.
- Then tap on Cash app balance.
- Find the option “Borrow up to $200”. Click on it.
- Tap to unlock the option.
- The scroll to continue.
- Wait for the app to ask you the amount you wish to borrow.
- Enter the amount.
- Then go through the user agreement.
- Accept the terms and conditions.
Is Cash App Safe To Borrow Money From?
Cash App loan feature is a legitimate program that you can benefit from as a Cash App user. Moreover, the app has layered security systems that ensure your funds are safe at all times. Some of the ways in which it guarantees user safety are listed below:
- Encrypted customer information such as sensitive data and transaction details.
- Card processing system functions in accordance with PCI Data Security Standard.
Peer-to-peer payment applications like Cash App are designed to carry out quick transfers and therefore, majority of people rely on them for daily transactions. However, there are precautionary steps you need to rake regardless of the safety that app promises to provide.
If your account details fall into wrong hands due to your own negligence, there is little that Cash App authorities will be able to do for you.
When you are borrowing money through Cash App, remember that it does not require information more than the app already has. Do not share private data with any third-party claiming to provide Cash App loan.
What Are Other Apps/Banks That Can Help You With Cash Advances?
Although the criteria of qualification for Cash App overdraft is not a strict one, there can be many reasons why you are ineligible for the short-term loan. Don’t fret because there are always alternative to look at in the market.
Chime is one of the most popular online bank in the US. Ever since its launch in 2013, the bank has grown its customer base at an outstanding speed. The only thing you need to watch out for is that applicants must be older than 18 years of age to open a Chime account.
You can get a checking account with Chime without any monthly fees. Then you will be able to access the SpotMe feature that allows for overdrafts of up to $200, similar to Cash App.
You should have a single deposit of $200 or more in your account to be eligible for overdraft. Moreover, you can overdraw as little as $20. This is also the limit you will be allowed if you are new Chime user.
The bank will gradually increase the limit up to $200 depending on how responsible you are with spending, how frequently you use Chime account, stability of account history, and the direct deposit amount as mentioned above.
When the Chime app changes your limit, it will notify you via alerts.
Keep in mind that SpotMe feature does not cover for non-debit card transactions such as ACH transfers. It also does not apply to checkbook transactions.
Earnin is a cash advance app that lets you get access to borrowed funds at any part of the month, unlike most other apps that give you cash just a couple of days before the payday.
If you are new to this platform, it will take a couple of minutes only to create an account here. You don’t need to switch bank as the app is compatible with all major financial institutes. Wait for the app to verify your account and complete the set up.
Then you can access wages with Earnin within minutes. Moreover, the Cash Out feature of this cash advance app lets you withdraw $100 per day or $500 per pay period.
On top of all this, Earnin does not have any hidden charges that you should be concerned about. All the fees are disclosed in the agreement. In addition to the charges, you can choose to pay tip or not as these do not have any impact on your pay period withdrawals.
My favorite part of using Earnin to access short-term loan is that it send the funds directly to bank account within minutes if you have signed up Earnin’s Lightening Speed feature.
Albert app can also help you deal with a small financial emergency by offering cash advance of up to $250. Moreover, there are no credit checks or interest on this amount.
You can get up to 3 Albert Instant cash advances per pay period. You will eligible for more loan once you have paid the outstanding amount.
Albert does not require you to move the deposit to your bank account in order to use it. You can access the advance in app as well by creating a bank account through Albert terms as Albert Cash. You will get a $150 cash bonus as a new Albert member!
Albert Cash is a perfect checking account that you access paycheck two days earlier and get instant cash advances as well.
There are some additional tools that you can make use of as well with Albert. It helps you in tracking budget, saving through helpful tips, and also gives professional support on financial matters to ensure you stay on top of your advances all the time.
Cash App offers short-term loan only but with cash advance app like PockBox, you can hope to get up to $2,500 within minutes. It works by connecting you to different, suitable lenders who are willing to provide funds on interest rates that you are comfortable with.
You have to sign up with Pockbox app by providing some basic information such as full name, residential address, contact number, social security number, etc.
PockBox makes it easy to hunt down an appropriate lender and has multiple options available even if you have a poor credit score. Once you are connected with a party offering loan, the application and approval process is straightforward. You have to answer a few simple questions that take a couple of minutes only.
5. One Finance
One Finance is a new name in the list of platforms that can help you not just by providing a financial backup in times of need but also in your efforts to build a credit line and better credit score.
The maximum amount that you can overdraft with One Finance is $200. Overdrafts are only possible if you deposit at least $20 first.
How overdrafts work on this platform is a bit different as compared to others like Axos or PockBox. You can access overdrafts here on the Spend Pocket through the Saving Pockets. This means the account puts aside small payments from checking or savings account into the Savings Pocket and then use these to pay off the overdraft over time.
One Finance charges 1% interest a month at 12% APR if you are unable to pay off the overdraft in duration of the ongoing month. I know this may sound like a lot but the platform has much better interest rates than what most of the traditional banks are charging.
Axos Banks has been operating for a couple of decades now. Although it was limited in features at the start, the bank has expanded its scope of services over time. It now offers free overdraft to accountholders given they have the right kind of Axos checking account.
The bank has five different checking account namel Essential Checking, Rewards Checking, Cashback Checking, Golden Checking, and First Checking but the overdraft is permitted with first 3 options only.
You can choose to open any checking account without monthly account fees. These offer unlimited ATM fee rebates, online banking, direct deposits, etc.
Axos Bank stands out in the list of other banks in the US as it offers similar perks but with considerably lower fees. The bank operated online only but seems to have a network larger than some of the prominent banks with physical branches.
It is one of the best online banks that offers some extra cash in times of emergency. You have to open a checking account with Current beforehand. It is easy to do so since you only need to provide the Social Security Number, US Residential address, and phone number.
If you are new to this platform, the bank may only allow you to cash out $25 but the limit gets reviewed over time. With good credit history, the limit will be hopefully increased in just a couple of months.
Overdraft from Current account, known as Overdrive, can get you up to $200, similar to the amount that Cash App lets you borrow.
However, you must sign up for their premium account and receive a deposit of at least $500 every month to be eligible for overdrafting from Current bank account.
You can receive the overdraft by using the Visa debit card at an ATM. Just swipe and the additional funds will cash out without any hefty fee. You can also exceed the card limit for payments when shopping or getting a gas refill at the station. This will automatically be considered an overdraft when you do.
Before You Go!
Cash App overdraft can happen accidentally but it is never a smart thing to do. Therefore, I recommend you use the app for payments only when you are sure there are sufficient funds present. Otherwise, you can request a loan from Cash App or explore other options for cash advances like Chime SpotMe and Earnin. Most of the platforms do not charge a fee for overdrafting but they have certain criteria that must be fulfilled.
There are obviously alternatives to Cash App such as ATMs that allow overdrafts and overdrafting debit card on purpose that you should look into!
Miriam Caldwell is a dedicated & expert freelance writer to educate people about personal finance management and budgeting. She shared her knowledge and published the articles at TheBalance.com, GOBankingRates, and BlissfullyDomestic.com. Many financial institutes pick Caldwell as the brilliant source for educational personal finance content.