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.
Overdrafting at Gas Stations
Transaction approval depends more on your bank than on a gas station’s policies. Representatives from various Shell and Speedway gas stations told us that the bank determines whether your card is approved, not the policies or payment machines at the pumps.
Also, 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 online account management portal for 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 your bank approves an overdraft transaction, 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.
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): the actual debit amount, and a pre-authorization hold.
The pre-authorization hold can be anywhere from $1 to over $100, and while it should only last for about 48 hours, it could remain on your account for several days. Our article lists which gas stations only hold a $1 pre-authorization charge.
Note that your bank determines the amount for the 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 depending on your bank and individual account.
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 may still be at risk for an overdraft, consider using a different payment method at the pump, such as cash, a credit card, or a gas card.