USAA allows overdrafts on checking accounts, but only if you enroll in overdraft protection or link a savings account

USAA does not automatically overdraft your checking account. If you try to spend more money than you have, the transaction will be declined unless you have set up one of two things: overdraft protection (which links to a savings account or money market account) or overdraft coverage (which lets USAA cover small shortfalls). Without either one in place, you cannot go negative.

If you do have overdraft protection enabled and you overdraft, USAA transfers money from your linked account to cover the gap. If you have overdraft coverage, USAA covers the amount up to a limit they set based on your account history — usually between $100 and $1,000 for new customers. Both options cost money if you use them, and both require you to repay what you borrowed.

Key Takeaways

  • USAA overdraft protection links your checking account to a savings account and transfers money automatically when you go negative, with no fee for the transfer itself.
  • USAA overdraft coverage lets USAA lend you money up to a limit if you overdraft, and you pay a fee per transaction ($35 as of the last update, though this varies).
  • Transactions will be declined if you have no overdraft protection or coverage in place and insufficient funds in your account.
  • You can turn off overdraft coverage in your USAA online account or mobile app, but overdraft protection requires a linked savings account to work.

How overdraft protection works with a linked savings account

Overdraft protection is the safer option if you have money in a savings account. You link your USAA savings account, money market account, or even a line of credit to your checking account. When a transaction would overdraft your checking account, USAA automatically transfers money from the linked account to cover it.

There is no fee for the transfer itself, but you lose the interest you would have earned on that money while it sits in your checking account instead of your savings account. If you overdraft frequently, you are also paying the opportunity cost of keeping a large emergency fund in savings instead of invested elsewhere. The real cost is that you need to have the money available in the first place — overdraft protection does not create money, it just moves it.

You set up overdraft protection through your USAA online account or mobile app. Go to your checking account settings, find the overdraft protection option, and select which account to link. USAA will ask you to confirm the linked account before it takes effect.

How overdraft coverage works and what it costs

Overdraft coverage is USAA's version of a short-term loan. If you overdraft and do not have overdraft protection set up, USAA can cover the transaction for you — up to a limit. That limit depends on your account history and creditworthiness. New customers often start at $100 to $500; established customers may have limits of $1,000 or more.

Each overdraft transaction costs a fee. As of the most recent update, USAA charges $35 per overdraft transaction, though this fee can change. If you overdraft five times in a month, you pay five fees. The fee is charged to your account, which can push you further negative and trigger more overdraft fees — a cycle called overdraft spiraling.

You can turn off overdraft coverage in your USAA app or online account. Go to your checking account settings, find overdraft options, and toggle off overdraft coverage. Once it is off, transactions will be declined if you do not have enough money, and you will not be charged overdraft fees.

What happens if you overdraft and cannot repay

If you overdraft and your account stays negative for more than a few days, USAA will send you a notice. The exact timeline depends on the size of the overdraft and your account history, but USAA typically expects you to bring your account back to zero within 10 business days.

If you do not repay the overdraft, USAA can close your account and report the negative balance to ChexSystems, a banking history database. This makes it harder to open a checking account at other banks for up to five years. USAA may also refer the debt to a collection agency if the overdraft is large enough.

If you overdraft and realize you cannot repay it quickly, contact USAA customer service right away. Explain your situation and ask whether they can waive the overdraft fee or give you more time to repay. USAA sometimes waives fees for customers with good account history, especially if the overdraft was a one-time mistake.

Overdraft protection versus overdraft coverage: which one to choose

If you have a USAA savings account with money in it, overdraft protection is the better choice. You avoid fees, you keep control of your money, and you can see exactly how much you are borrowing from yourself. The only downside is that you need to have the money saved up first.

Overdraft coverage is useful as a safety net if you do not have savings, but it is expensive. A single overdraft costs $35, and if you overdraft regularly, those fees add up fast. It is better to think of overdraft coverage as an emergency backstop, not a substitute for budgeting or keeping an emergency fund.

The best approach is to have both: overdraft protection linked to a savings account as your first line of defense, and overdraft coverage turned on as a backup in case you overdraft your savings account too. This way, you have two layers of protection before transactions start getting declined.

How to set up or change your overdraft settings

Log into your USAA online account or open the USAA mobile app. Go to your checking account, then select Settings or Account Settings. Look for Overdraft Options or Overdraft Protection.

To set up overdraft protection, select the option to link an account and choose which USAA savings account or money market account you want to use. USAA will confirm the link and it will be active within one business day.

To turn off overdraft coverage, find the toggle for overdraft coverage and switch it off. USAA will ask you to confirm. Once it is off, you will no longer be charged overdraft fees, but transactions will be declined if you do not have enough money.

If you cannot find these settings in the app, call USAA customer service at the number on the back of your card. A representative can walk you through the process or make the changes for you over the phone.

Frequently Asked Questions

What is the difference between a declined transaction and an overdraft?

A declined transaction is rejected by USAA because you do not have enough money and you do not have overdraft protection or coverage. An overdraft is when USAA allows the transaction to go through anyway — either by transferring money from a linked account or by lending you the money. Declined transactions do not cost you a fee; overdrafts do.

Can I overdraft my USAA savings account?

No. USAA does not allow overdrafts on savings accounts. If you try to withdraw more than you have, the transaction will be declined. Overdraft protection and overdraft coverage only apply to checking accounts.

If I have overdraft protection, will USAA automatically transfer money every time I swipe my debit card?

No. USAA only transfers money if a transaction would actually overdraft your checking account — meaning the transaction would bring your balance below zero. If you have enough money in your checking account, no transfer happens. Small transactions that do not push you negative do not trigger a transfer.

How long do I have to repay an overdraft?

If you have overdraft protection, you should repay the transfer as soon as possible to restore your savings account balance. If you have overdraft coverage, USAA typically expects you to bring your account back to zero within 10 business days, though this can vary. Contact USAA if you need more time.

Will overdraft fees hurt my credit score?

Overdraft fees themselves do not appear on your credit report. However, if you overdraft and do not repay, USAA can report the negative balance to ChexSystems, which can make it harder to open accounts at other banks. If USAA sends your debt to a collection agency, that will appear on your credit report and damage your score.