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Overdraft Line of Credit

What is an Overdraft Line of Credit?

Instead of charging expensive overdraft fees when your balance goes below $0.00, we offer the option of choosing your own Overdraft Line of Credit with 360 Checking. Depending on the limit you are offered and select, your transactions on 360 Checking will be processed when you dip below $0.00 up to whatever dollar amount you chose.

Instead of paying an expensive overdraft fee, you’ll just pay interest on the amount you borrowed for the amount of time it’s outstanding (we’re talking pennies).  Try out our Overdraft Line of Credit Calculator Opens a new window and see how we compare.

Why is the balance on my 360 Checking negative?

You'll see a negative balance when you’ve made a withdrawal or purchase that has taken your balance below $0.00. The negative amount reflects the amount your Overdraft Line of Credit has kicked in to cover the difference between your available balance and the amount of the withdrawal or purchase.

How does the Overdraft Line of Credit work?

If you choose to have an Overdraft Line of Credit, it applies to your 360 Checking and is accessed anytime your balance goes below $0.00.

Here’s an example: A 360 Checking Customer has $1,000 in his 360 Checking, and an Overdraft Line of Credit limit of $50. He buys a new laptop computer for $1,050 using his 360 Checking Card. This transaction will be processed using the $1,000 balance in his 360 Checking, and $50 from his Overdraft Line of Credit. His 360 Checking balance will now appear as -$50 on our website, which reflects the $50 credit used from his Overdraft. He will then pay a competitive interest rate on the $50 he borrowed.

How do I apply for an increase on my existing limit or reapply for an Overdraft Line of Credit?

It’s easy, just follow these simple steps:

  1. Sign in to capitalone360.com
  2. Click on your ‘360 Checking’
  3. Go to the ‘Overdraft’ tab
  4. Click on the 'Apply for an increase' button
  5. Review the terms and conditions and hit ‘Submit’
  6. You’ll receive a decision online immediately and an email response from us confirming the decision 

Keep in mind, the maximum line amount possible is $1,000.

In order to apply online, your account must:

  1. Be in good standing
    1. You (or your joint account holder) must not have any outstanding account restrictions
    2. You (or your joint account holder) must not be past due on your overdraft line of credit payment
    3. You (or your joint account holder) must not have a pending request to increase your overdraft line of credit
  2. Be active (show at least one transaction besides interest accrual in the past 24 months)

Is there a charge for using the Overdraft Line of Credit?

You’ll pay a competitive interest rate – based on the Capital One 360 Prime Rate – on the amount you borrow.

How will I know if my 360 Checking balance has gone below zero and I’ve gone into my Overdraft Line of Credit?

You’ll receive an email notification alerting you when this occurs. When you sign in to capitalone360.com, you’ll also see a negative balance on your 360 Checking along with a reminder that your Overdraft Line of Credit is providing automatic protection. In order to pay back the balance, you’ll need to make a deposit.

What is the interest rate on the balance my Overdraft Line of Credit covers?

The current variable annual percentage rate as of is . It’s based on the Capital One 360 Prime Rate – a highly competitive rate much lower than most banks.

What is the Capital One 360 Prime Rate?

The Capital One 360 Prime Rate is used as the base rate index for some of our variable rate loans, and may be used as an index for other lending products. Adjustments to the Capital One 360 Prime Rate occur periodically, sometimes in line with changes to the Federal Funds Rate.

How is interest calculated on my Overdraft Line of Credit balance?

Whenever you dip into your Overdraft Line of Credit, we’ll calculate the interest owed from the day the transaction amount is posted until the balance is paid in full. There is no interest grace period for transactions that post against your Overdraft Line of Credit. Interest owed will be calculated by:

  • Multiplying the daily ending balance on your Overdraft Line of Credit by the daily periodic rate.
  • Daily periodic rate is calculated by dividing the current APR by 365 – or 366 in a leap year.
  • At the end of the month, we’ll add all of the interest owed amounts for the days that you held a balance in your Overdraft Line of Credit.
  • Then we deduct that amount – the finance charge – from your 360 Checking balance.

How do I make a payment on my Overdraft Line of Credit?

If you’ve dipped into your Overdraft Line of Credit or exceeded your overdraft limit and need to make a payment to bring your 360 Checking into good standing, just make a deposit.  Here’s how:

  1. Sign in to capitalone360.com
  2. Select the ‘Transfers & Deposits’ tab
  3. Transfer the minimum amount required from your external linked checking account or other Capital One 360 account to your 360 Checking

Keep in mind, any recurring deposits, either through Direct Deposit or an Automatic Savings Plan, will also count as a payment.

How do I pay the interest on my Overdraft Line of Credit balance?

At the end of each month, we'll automatically subtract any interest owed from your 360 Checking balance. If you dip into your Overdraft Line of Credit at any point in the month, the interest will be deducted at the end of that month.

If I’m carrying an outstanding balance on my Overdraft Line of Credit, when and how much will I have to pay?

If your 360 Checking balance is negative at the end of the month, you must make a deposit of at least the minimum payment amount by the last day of the following month. Here’s how to calculate your minimum payment amount:

  • If your month end Overdraft Line of Credit balance is over $3333.33 – you need to pay at least 3% of your outstanding balance.
  • If your month end Overdraft Line of Credit balance is between $100 and $3333.33 – you need to pay at least $100.
  • If your Overdraft Line of Credit balance is less than $100 – you must pay the entire outstanding balance.

We’ll send you a reminder email before your payment is due and additional reminder emails when you miss a payment. When you sign in to capitalone360.com, you’ll also see a message that provides instructions on how to make a payment.

What happens if I don't pay my Overdraft Line of Credit on time?

If you do not make the minimum deposit due by the last day of the following month, any missed payments will be included in the next payment due. If you miss a payment, a temporary hold will be placed on your account. Until a payment is made, you will not be able to use your 360 Checking Debit Card or make any withdrawals (including Bill Pay, Person2Person Payments, Mail a Check and Overnight a Check).

If you miss more than three payments, your Overdraft Line of Credit limit will be reduced to zero ($0), and your 360 Checking may be closed altogether. You’ll still need to make payments to the outstanding Overdraft Line of Credit balance.

This does not affect any other accounts you may have at Capital One 360.

Why is my Overdraft Line of Credit showing zero when I haven't exceeded my limit?

It could be reduced to zero for several reasons such as, an adjustment on your available limit as a result of late payments or an account review. If this does occur and you’re not sure why, give us a call at 1-888-464-0727 and one of our Associates will be able to provide you with more detailed information.

Do you pull my credit if I apply for 360 Checking and the Overdraft Line of Credit?

Yes. As part of your application, Capital One 360 will obtain information about you from a consumer credit reporting agency to confirm that you are eligible for 360 Checking. (But don't worry, this is a "soft pull" and won't affect your credit score.)

If you choose to apply for the Overdraft Line of Credit, a credit check is required. (This is a "hard pull" and may impact your credit score.)

Keep in mind, if you choose to apply for an increase to your Overdraft Line of Credit, that would also require us to do a credit check regardless of whether or not you were approved for the feature or an increase within the same day.

How do I apply for an Overdraft Line of Credit?

It’s easy, just follow these simple steps:

  1. Sign in to capitalone360.com
  2. Click on your ‘360 Checking'
  3. Go to the 'Overdraft' tab
  4. Click on the 'Apply Now' button
  5. Review the terms and conditions and hit 'Continue'
  6. Select your Overdraft amount and click 'Submit'

Keep in mind, the maximum line amount possible is $1,000.

In order to apply online, your account must:

  • Be in good standing
    • You (or your joint account holder) must not have any outstanding account restrictions
    • You (or your joint account holder) must not be past due on any other loan product
    • You (or your joint account holder) must not have closed an Overdraft Line of Credit within the past 31 days
  • Be active (show at least one transaction besides interest accrual in the past 24 months)
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