Large expenses like car payments or monthly rent often can’t wait, even though sometimes you may not have adequate funds in your account to make them. At times like these, consumers face a choice: skip a payment and face consequences, or overdraft their account and potentially face a fee from the bank.

For many consumers in this situation, the choice would be simple: make the payment and face the relatively smaller penalty from the bank. For others, the choice to overdraft isn’t available at all. But what if you could choose to overdraft, make your payments on time, and still avoid the fee?

As the issue of overdraft and overdraft fees continue to be a hot topic among consumers, banks and lawmakers, several banks have taken different approaches in addressing them. PNC took the lead in 2021 with its Low Cash Mode® solution, which provides customers with full account transparency and choices to help them manage through low-cash moments or mis-timed payments.

“Sometimes people just need a little more time to cover important expenses,” said Alex Overstrom, head of Retail Banking at PNC Bank. “And in these moments, we give them choices to make things right, very often without paying a fee. Low Cash Mode® serves customers very well — in a way that we believe is better than the way other banks approach overdraft.”

Control in the hands of the customer

Early last year, PNC introduced Low Cash Mode® to offer consumers more control in handling overdrafts. With Intelligent Alerts, Low Cash Mode® allows customers to be notified when their account is near or below zero. Extra Time gives them a chance to bring a negative balance to at least $0 through a deposit or funds transfer within at least 24 hours (and often more) before incurring a fee. And with Payment Control, customers can choose whether to pay or return certain checks and ACH items when their balance is negative. Ultimately, we only charge an overdraft fee if a customer remains in a negative balance after Extra Time expires, and that fee is capped at just one per day. The results have been impactful. Since the launch of Low Cash Mode®, PNC has paid nearly $1.4 billion in overdraft transactions where customers took action with Low Cash Mode and avoided overdraft fees1.

Giving customers options and time to avoid overdraft fees is simply the right thing to do, Overstrom says. Some studies estimate that consumers pay over $17 billion in overdraft fees per year2. Low Cash Mode® is a first-of-its-kind solution and a shift from that traditional fee model. PNC took the lead in addressing the issue of overdrafts through its digital platform – making Low Cash Mode® available to all 5.6 million Virtual Wallet checking account customers.

Changing banking as we know it

Results to date are positive. Since Low Cash Mode® launched, PNC customers have saved more than $72 million in overdraft and non-sufficient funds fees, by curing their accounts with the Extra Time allotted. Once reaching a negative balance, nearly two-thirds of customers have been able to use Extra Time to return their account to positive and avoid paying a fee. Customer complaints about overdraft have been cut in half.

“Through solutions like Low Cash Mode®, we are giving our customers the transparency and control that they need and deserve to effectively manage their financial wellbeing,” Overstrom said. “I’m proud of what our teams have built and the investment we have made in Low Cash Mode® as it demonstrates the ongoing the commitment that PNC has to putting our customers first.”