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Money

Overdrafts and fees, and how to avoid them

An overdraft means the bank paid for something you didn't have the money for, and usually charged you a fee. You can tell your bank you don't want debit card overdraft coverage, so those purchases get declined instead.

Easy15 min to doFree

You'll need

  • Your bank's app or website, or its phone number
  • Your account number

Do it like this

  1. Find out whether you're opted in. Ask your bank, or check your account settings, whether you have debit card overdraft coverage.
  2. If you don't want it, cancel it. For debit card and ATM transactions, the bank needs your opt-in to charge an overdraft fee, and you can opt out any time (FDIC).
  3. Ask about linking your savings as a backup. There's usually a transfer fee, but it's typically less than an overdraft charge (FDIC).
  4. Turn on low-balance alerts in your bank's app so you hear about it before you're short.
  5. Check your balance before big purchases and before automatic payments come out.
Watch out. Opting out doesn't stop every fee. Checks and automatic payments can still be returned with a non-sufficient funds (NSF) fee, and banks don't need your opt-in for those (FDIC).

If it doesn't work

  • If you already got hit with a fee, call the bank, ask politely whether they'll waive it, and say if it's your first one. There's no rule that they must, but it costs nothing to ask.
  • If fees keep happening, ask the bank for its fee schedule. Banks have to disclose every deposit account fee they charge (FDIC).
  • If you think a fee broke the bank's own rules, you can submit a complaint to the CFPB.

Good to know

What an overdraft actually is

An overdraft happens when you don't have enough money in your account to cover a transaction, but the bank pays it anyway. Many banks charge a fee for that, on top of having you pay back the amount (CFPB).

What it can cost

The FDIC says overdraft fees vary by bank but may cost around $35 per transaction, and some banks also charge a daily fee for every day you stay overdrawn (FDIC).

Other fees worth dodging

Monthly maintenance fees are often lower or waived with direct deposit or a minimum balance, and using your own bank's ATMs avoids out-of-network charges (FDIC).

Sources

  1. Consumer Financial Protection Bureau How can I avoid debit card overdrafts?
  2. Consumer Financial Protection Bureau What is an overdraft?
  3. Federal Deposit Insurance Corporation Overdraft and account fees

Lesson M1.3 · Last checked October 2, 2026 against the sources listed. See a mistake?