
A checking account with an overdraft line of credit can be a lifesaver when you're short on funds. This type of account allows you to borrow money from your bank to cover overdrafts, up to a certain limit.
The overdraft limit is typically set by the bank and can range from a few hundred to several thousand dollars. You can usually choose from a fixed or variable interest rate, depending on your needs.
Having a checking account with an overdraft line of credit can help you avoid bounced checks and bank fees. You can also use it to cover unexpected expenses or emergencies.
Expand your knowledge: No Overdraft Fee Checking Account
How It Works
The overdraft line of credit is a feature that can be linked to your checking account, providing extra protection against overdrafts. This feature is designed to help you avoid bounced checks and other fees associated with overdrafts.
To qualify for an overdraft line of credit, you must have an annual income of at least $10,500 and fund an eligible Citibank deposit account with a balance of at least $1 within 21 days from the date of application.
The overdraft line of credit can be used to transfer funds from your checking account to any linked account, such as your Citi checking, savings or a money market. You can also borrow funds from your overdraft line of credit directly.
The overdraft line of credit has a variable Annual Percentage Rate (APR) of 19.50% as of February 28, 2025. This rate may vary over time.
Here are the key benefits of an overdraft line of credit:
- Immediate access to funds that can help you every day or during emergencies
- Competitive rates based on credit history and account relationship
- Most members will qualify for limits between $500 and $7500 (higher limits may be considered)
- Affordable monthly payments
Protection and Benefits
Having an overdraft line of credit on your checking account can provide you with a safety net in case of financial emergencies.
It helps you avoid expensive bank fees that come with non-sufficient funds.
Overdraft protection provides you with a safeguard against bounced checks, up to the amount of your available credit line.
You can use a revolving line of credit whenever you need quick access to cash.
The APR for an overdraft line of credit can be as high as 19.50%.

With overdraft protection, you can avoid having your bank decline pending transactions if there isn't enough money in your account.
This can prevent problems like your bank charging you a fee for non-sufficient funds, the merchant charging you an additional fee, and you not being able to pay for essential goods and services.
An overdraft line of credit can automatically transfer the amount needed to cover pending transactions, providing you with peace-of-mind.
There's no advance fee for setting up an overdraft protection plan, making it a convenient option.
You can link your overdraft line of credit to your checking account to create overdraft protection, ensuring that your checks don't bounce and you don't miss payments.
Overdraft protection can be linked to a savings account as well, giving you more flexibility.
Here are the benefits of having an overdraft line of credit on your checking account:
- Protection against bounced checks and non-sufficient funds
- Quick access to cash through a revolving line of credit
- No advance fee for setting up overdraft protection
- Automated transfers to cover pending transactions
- Flexibility to link to a savings account
Three Types of Protection
You can have overdraft protection through a Checking Plus line of credit account, which provides the overdraft protection you need to help protect you from bounced checks.

This type of protection is right for you if you want the safety of overdraft protection, protection against bounced checks up to the amount of your available credit line, or if you could use a revolving line of credit.
A Checking Plus line of credit account has a variable APR of 19.50%.
You can also have overdraft protection through an Overdraft Protection Plan, which has a revolving line of credit designed to protect you from accidental overdrafts and can help you cover short-term cash needs.
This plan has no advance fee and automatically transfers the amount needed.
There are three common types of overdraft protection: Standard overdraft, secured overdraft, and clean overdraft.
Here are the three types of overdraft protection in a nutshell:
Comparison and Setup
A checking account with an overdraft line of credit can provide immediate access to funds that can help you every day or during emergencies.
You can expect competitive rates based on your credit history and account relationship, which is a plus for responsible account holders. Affordable monthly payments are also a benefit, making it easier to manage your finances.
Most members will qualify for overdraft limits between $500 and $7,500, although higher limits may be considered for those with good credit history. Cash credit and overdraft lines of credit both refer to lines of credit with a lender, but they differ in their application and requirements.
Loan vs Credit
A loan and a line of credit are two different financial tools that can help you cover expenses. A loan has a set term and payment, with a maturity date.
The main difference between a loan and a line of credit is that a loan has a fixed payment schedule, while a line of credit operates like a credit card and is revolving until you close it down. Your payment will vary based on the balance.
With a line of credit, you'll be charged interest from the transaction date, and the APR for cash advances is 13.99%. This means you'll be charged interest on your balance from the moment you make a purchase.
One of the benefits of a line of credit is that there's no annual fee, and no transaction fees. However, if you're late with a payment, you'll be charged a $25.00 late payment fee.
It's worth noting that not all applicants will qualify for a line of credit, and the interest rates and fees may change over time. To find out what may have changed, you can call 574.534.2506 or write to Interra Credit Union, PO Box 727, Goshen, IN 46527.
Here's a comparison of loan and line of credit features:
Setting Up Cash Credit and Protection
Setting up cash credit and protection can be a straightforward process. Businesses that can provide collateral may easily get access to cash credit, which means they won't have liquidity problems in case they need capital quickly.
Cash credits are commonly renewed on an annual basis for business customers, so they don't need to re-apply for credit. Interest payments made on cash credit are tax-deductible, which can help businesses lower their tax burden and save money.
To add overdraft protection on your account, you must apply for the service, just like you would for any other credit facility. The bank reviews the application and approval is subject to your creditworthiness.
Unlike cash credit, customers can't claim interest paid on overdraft protection for a tax deduction. Overdraft protection is a type of short-term loan against your account, allowing you to withdraw money or pay bills even if there's not enough money in your account.
Readers also liked: Does Bank of America Cash Checks for Non Customers

If you're a business customer, you may be able to get a cash credit account with a higher overdraft limit and smaller real interest costs compared to an overdraft. This is because penalty fees aren't triggered for using the account.
Here are the key differences between cash credit and overdraft protection:
- Cash credit is commonly offered to businesses, while overdraft protection is available to individual customers.
- Cash credit typically requires collateral, while overdraft protection does not.
- Cash credit has higher overdraft limits and smaller real interest costs compared to overdraft protection.
Which Has a Lower Interest Rate? Cash Credit
Cash credit services generally have lower interest rates compared to personal loans. This is because the interest rates for business cash credit services are usually lower than an individual bank customer's overdraft fees.
Your overdraft limit is likely to be lower than what you could borrow with a credit card or personal loan.
Worth a look: Union Bank of India Fixed Deposit Rates
Frequently Asked Questions
Can you overdraft a line of credit?
A line of credit is not an overdraft, but rather a separate account with its own limit and interest charges. However, overdraft protection can be attached to a line of credit to help with short-term needs.
Can I get a line of credit with my checking account?
Yes, a personal line of credit can be tied to your checking account, providing access to funds when needed with no annual fees or transfer fees. This can also offer protection against nonsufficient funds (NSF) and overdrafts.
Sources
- https://www.citi.com/online-services/checking-plus
- https://www.ufirstcu.com/loans-credit/overdraft-line-of-credit
- https://www.interracu.com/personal/loans/checking-line-of-credit
- https://corebank.com/personal/borrowing/overdraft-protection/
- https://www.investopedia.com/ask/answers/110614/what-difference-between-overdraft-and-cash-credit.asp
Featured Images: pexels.com