Method and Apparatus for Allowing Secured Overdrafts of Reloadable Debit Card Accounts

Abstract

The invention discloses a reloadable debit card which may be overdrawn by authorized merchants thus allowing future and recurring payments to be made via ACH transactions against this debit card. In addition, the cardholder may repay indebtedness simply by depositing funds onto the reloadable debit card.

1 . A method for providing overdraft funds to at least one user, the method comprising the steps of:
 a) having the user conduct a purchase using a reloadable debit card or the like;   b) wherein when the debit card carries insufficient funds to cover the purchase, overdrawing the debit card by an overdraft amount, that being the difference between the cost of the purchase and the funds available in the debit card; and,   c) having the user reimburse the overdraft amount.   
     
     
         2 . A method as defined in  claim 1 , wherein in step c), the user reimburses with additional charges, such as a penalty fee or interest. 
     
     
         3 . A method as defined in  claim 1 , wherein in step a), the purchase is conducted at a merchant, and wherein in step b), it is verified that the merchant is authorized for overdrafts before the debit card is overdrawn. 
     
     
         4 . A method as defined in  claim 1 , wherein between steps b) and c), the overdraft amount is deposited in a secure account. 
     
     
         5 . A method as defined in  claim 4 , wherein in step a), the purchase is conducted at a merchant, and wherein between steps b) and c), the overdraft amount is deposited in a secure merchant account. 
     
     
         6 . A method as defined in  claim 1 , wherein in step c), the user reimburses the overdraft amount with at least one deposit made to the debit card, with at least one amount being taken from the debit card until the overdraft amount has been fully reimbursed, including any additional charges, such as a penalty fee or interest.