What is courtesy pay?

Courtesy pay is a service offered by financial institutions, such as banks or credit unions, that allows account holders to temporarily overdraw their checking accounts in order to cover transactions when they have insufficient funds. When a transaction tries to clear but there are not enough funds in the account to cover it, the financial institution may choose to pay the transaction on the customer's behalf and charge an overdraft fee.

Courtesy pay can be a helpful feature for account holders who may accidentally overdraw their account or have unexpected expenses. However, it is important to be aware that overdraft fees can add up quickly and can be expensive. It is always recommended to monitor your account balance closely and take steps to avoid overdrawing your account whenever possible.

Financial institutions may have specific policies and fees associated with their courtesy pay service, so it is important to understand the terms and conditions of your account in order to make informed decisions about using courtesy pay.