On a previous article of mine- How To Borrow From Cash App, I talked about how this financial giant could let you borrow money during financial crisis. Not only let you borrow money, but will not charge you interest while it waits for repayment. As I mentioned on the article, that was what won me over to Cash App after the resistance to join it for half a decade.
Having mentioned that, can you overdraft Cash App?
Yes, Cash App offers overdrafts for qualifying members. The best part of it is, you do not have to pay anything to access more than you have as balance. Once you qualify for it, you can overdraft either at an ATM, through your cash card or at a cashier.
I know this sounds too good to be true. This is because there is a catch to it. Do not act surprised now. You knew it was coming.
Not every user can access the Cash App free overdraft coverage. You have to meet its eligibility requirement to be able to withdraw more than your balance. I am going to talk all about it on this article.
How Does Overdraft Work On Cash App
How overdraft works on Cash App is simple. You qualify to use the feature, then you are allowed to withdraw more than you have available on your balance. There is no overdraft fee.
There are three requirements before you qualify for Cash App overdraft.
- You must have an activated Cash App card. If you have not activated yours, I explained a step by step method of activating a new Cash App card. I encourage you to read the article.
- Secondly, set up monthly direct deposit on Cash App. The app wants you to receive at least $300 in direct deposit every month for you to be eligible for this convenience. There is an alternative to having a monthly direct deposit set up. Spending about $500 every month with your cash app card or pay will automatically qualify you.
- Thirdly, be sure you do not have a bad history with Cash App. This includes unpaid debts on its Cash App borrow feature.
If you met these three requirements, you are good to set up the Cash App overdraft. Oh, I forgot to mention. Teens are not eligible for this feature. This is because debt instruments like this feature in the United States is only open to legal adults.
On the next part of this article, I walk you through the overdraft process. Here is what I want you to know below.
How Do You Overdraft On Cash App?
To be able to access the free Cash App overdraft, you have to go on the app to turn it on. Prior to turning it on, I am assuming you have met all the requirements I have highlighted above. If so, here is how to turn on overdraft on Cash App below.
- Login to Cash App
- Tap on the Home icon below the app.
- You should be able to see your cash card on this page. Tap on cash card to reveal the card page. Scroll down until you see Free overdraft coverage. If the Cash App overdraft coverage is on, it will say. Otherwise, it will show as Off.
- Tap on Free overdraft coverage. You will be asked whether you want to Earn Green status.
- If you have not reached green status yet, the progress will be shown to you. You can earn the status by spending $500 each month with your cash card. Also, spending the same amount with Cash App Pay earns you the green status. This is as long as your direct deposit is not set up.
- Follow the instructions to turn it on.
Most times, people with no direct deposit will not have the green status. This is especially, when they do not spend $500 monthly on their Cash App card. I do not know about you, but I do not spend that much using the cash card. I only use it for minor expenses like gas or coffee.
Maybe, you use the card the way I do.
So, I will recommend just setting up Cash App direct deposit. It will automatically earn the green status needed to turn on overdraft coverage on Cash App. I cannot stress the benefits of the green status. Anyways, the above is how you turn on overdraft coverage.
Cash App Overdraft Coverage
You can receive up to $200 in free Cash App overdraft. It is the amount which the financial service is willing to front you. Will you always get this amount?
You will not always get this amount. This amount is only when you are in good terms with Cash App. Simply put, your green status is still there. Also, you do not owe debts on Cash App which you have not paid back.
Furthermore, the Cash App overdraft coverage varies from person to person. There are people who get up to the $200, then there are others who may only get $50 for overdraft. When you qualify for that amount, the app lets you know. To overdraft up to $200, will always depend on your direct deposit amount monthly.
I think most financial technologies do this nowadays as a way of attracting new customers. Chime SpotMe feature is another one which is quite similar to the overdraft feature on Cash App. I like how these services are coming through for young working class adults without getting them in debt. If this is the future of banking, I feel like the banking industry will totally earn the trust of the American young working class.
Cash App Overdraft Limit
How much free overdraft coverage can I get on Cash App?
When I started, I was allowed to only overdraft $25. Eligible members are able to access free overdraft coverage up to $50 initially. Then, it slowly gets increased with time.
But, this will depend either on your monthly expenditure or direct deposit.
There is a maximum Cash App $200 overdraft limit. This is the most you can access on this feature. Personally, I feel like this is hard to get when you are not actively getting more than $300 in direct deposit. Or even better, spending more than $500 monthly through cash card or Cash App pay.
As for an increase on the free overdraft limit on Cash App, you can only increase up to $200 from your initial limit. As I previously mentioned, this will always depend on you maintaining your green status and an activated cash card. Cash App support cannot help you with this.
This is why I mentioned about checking your progress to the next overdraft limit. Cash App is good at letting you know when you are ready. So, be sure to keep checking on the progress.
Finally, just because you can get overdraft now does not mean you will not lose it. You can access free overdraft coverage, as long as you maintain Cash App green status. If you lose the status, you will cease to access the overdraft. I advise you stick to the policy of this feature usage, so you can always have access to it.
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