What is a courtesy pay fee?

A courtesy pay fee is a fee that a financial institution charges when a customer overdraws their account and the bank covers the transaction as a courtesy. Essentially, it is a form of overdraft protection where the bank allows the account to go negative in order to avoid a declined transaction.

Banks typically charge a flat fee for each transaction that exceeds the account balance, up to a predetermined limit. This fee can vary depending on the financial institution, but it is usually around $30-$35 per transaction.

It is important to note that courtesy pay fees can add up quickly if a customer consistently overdraws their account, so it is best to use this service sparingly and only in emergencies. Customers should also be aware of the terms and conditions regarding courtesy pay fees set by their bank.