Short Answer: Whether or not you are allowed to overdraft at a gas station is determined by your agreement with your bank, rather than by the gas station’s payment policies. Overdrafting typically comes with steep fees, but many banks have coverages in place to help you avoid this. For more details on how overdrafts work and specific considerations for overdrafting at gas stations, see below.
Overdrafting at Gas Stations
Transaction approval depends more on your bank than on a gas station’s policies. Representatives from various gas stations including Shell and Speedway told us that the bank determines whether your card is approved, not the policies or payment machines at the pumps. Likewise, your bank must have your consent to approve overdrawn debit transactions and fees, as noted by the U.S. Department of Treasury.
Because of this, you can overdraft your account at virtually any gas station if your bank approves it. For more information, we went straight to the source of overdraft issues and policies: the banks. Whether or not you overdraft will depend on how much money is in your bank account, the total amount of your purchase, and the overdraft policies that apply to your bank account.
Bank Overdraft Policies
Exact policies differ by bank, but there are some commonalities. We checked the overdraft policies of six major U.S. banks (Bank of America, Capital One, Chase, Citibank, Fifth Third, and Wells Fargo) and found the following:
- All of the banks we checked offered options for overdraft coverage and protection. You should contact your bank or check your account management portal online to see specific details for your bank and account type, but common options include:
- Auto-declining overdrawn transactions
- Transferring from savings
- Overdrafting from a line of credit (with interest, and occasionally transaction fees)
- Allowing one business day to replace the overdrawn amount before fees are charged
- Many banks will approve overdrawn transactions if they are paid by check, are recurring purchases, or are made using the account number. ATM and debit transactions will be declined, with no overdraft fees charged, unless you have opted into overdraft coverage. If you have not, overdrawn debit transactions at gas stations will be declined.
- If an overdraft purchase is approved, the fee is usually around $35 per transaction, though the exact amount varies by bank. Some banks will waive overdraft fees for certain account types. We provide more information, including a list of banks and credit unions with each institution’s overdraft fees and policies revealed, in our article about how much you can overdraft your checking account.
If your checking account balance is low and you’ve consented to overdrafting transactions, it can be easy to accidentally overdraft at a gas station. In some cases, your balance may be low at a time when you need gas, and you may choose to overdraft out of necessity — overdraft fees can make this an expensive option, so you should consider intentional overdrafts as a last resort.
It’s important to factor in pre-authorization holds when considering overdrafting on transactions at gas stations. When you purchase gas using a debit card, two charges will appear on your account, according to the National Association of Convenience Stores (NACS): an authorization charge, which is usually for only $1 (but can be higher), and a debit hold. The authorization charge is held only briefly and exists to check that the card is valid. But the debit hold can be much more and can be held much longer.
In our previous research, we found that banks determine the amounts for authorization charges required at gas stations. If you overdraft because of a hold, you should contact your bank for policy information and assistance in removing it.
Avoiding Overdrafts at Gas Stations
Unfortunately, it’s difficult to know for sure whether your gas purchase will cause an overdraft since payment policies and hold amounts vary so widely by the gas station and by the bank. You should become aware of your account’s overdraft settings by contacting your bank or checking your status online.
One way to avoid a hold while still using your debit card at the pump is to prepay at the register and use the PIN associated with your debit card/checking account. Transactions authorized with a PIN typically do not incur hold charges.
Additionally, if you think you still may be at risk for overdrafting, consider using a different payment method at the pump such as cash, a credit card, or a gas card.
Whether or not you will overdraft on a gasoline purchase is determined by the terms of your bank account, including whether you have opted in for overdraft protection or overdrawn transaction approval. Gas stations do not have any control over whether your bank will approve the transaction, so you can essentially overdraft at any gas station if your bank allows it. If you think you may overdraft, consider using a different payment method to avoid steep overdraft fees.