Your bank will charge you an overdraft fee, usually $25 to $35 per transaction that pushes the account below zero
When you spend more money than you have in your checking account, the bank covers the difference temporarily. That coverage is not free. Most banks charge an overdraft fee each time a transaction goes through on a negative balance — meaning a single purchase can trigger multiple fees if several transactions post on the same day.
The fee amount varies by bank. Chase charges $35 per overdraft. Bank of America charges $35. Smaller regional banks may charge $25 to $30. Some banks charge nothing if you stay negative for only a few hours, while others charge the moment the balance dips below zero, regardless of how briefly.
Beyond the immediate fee, a negative balance can affect your ability to use your debit card, write checks, or set up automatic payments. Some banks will freeze your account or close it entirely if the negative balance persists or if you overdraft repeatedly.
Key Takeaways
- Overdraft fees typically range from $25 to $35 per transaction and can stack up if multiple charges post while your account is negative.
- Your bank may deny new transactions once your account goes negative, or it may cover them and charge you a fee for each one.
- Negative balances can be reported to ChexSystems, a banking history database that other banks check before opening new accounts.
- Paying back the negative balance quickly stops additional fees, but the damage to your banking record may persist for years.
- Overdraft protection linked to a savings account or credit card can prevent overdraft fees by covering the shortfall automatically.
How overdraft fees stack up in a single day
If your account has $50 and you make three debit card purchases of $30 each, you do not get charged one overdraft fee. You get charged three — one for each transaction that posts while the balance is negative. This is called overdraft stacking or multiple overdraft fees.
The order transactions post matters. Banks do not always process charges in the order you made them. Some banks post larger transactions first, which can push your balance negative faster and trigger more fees on smaller transactions that follow. Other banks post in chronological order. Check your bank's specific posting order policy — it is usually in your account agreement or on their website.
A single day of overspending can result in $75 to $105 in fees if three transactions trigger overdrafts. Over a week, if you keep spending on a negative balance, fees can easily exceed $200.
What your bank does when your account goes negative
Banks handle negative balances in two ways: they either decline the transaction or they cover it and charge you a fee. Most banks will cover the transaction and charge the fee — this is called overdraft coverage — but they are not required to do so.
If your bank declines the transaction, the charge simply does not go through. Your debit card gets rejected at the register. No fee is charged. However, if the transaction is an automatic payment (like a utility bill or subscription), a declined transaction may result in a late payment on your record, which can hurt your credit score.
If your bank covers the transaction, the money goes through, your balance goes negative, and you are charged a fee. You now owe the bank both the original amount you overspent and the overdraft fee. The bank may also charge you a daily fee for each day your account remains negative — typically $5 to $10 per day — until you bring the balance back to zero.
How a negative balance affects your banking record
A negative checking account balance can be reported to ChexSystems, a database that tracks banking history. When you apply to open a new checking account at a different bank, that bank checks ChexSystems to see if you have a history of overdrafts, bounced checks, or unpaid negative balances.
If ChexSystems shows a negative balance that you did not pay back, new banks may refuse to open an account for you. Some banks will open an account but restrict your access to certain features or require a higher minimum balance. The negative mark can stay on your ChexSystems record for up to five years.
A negative checking account balance is different from a late payment on a credit card or loan — it does not directly affect your credit score. However, if the bank sends your unpaid negative balance to a debt collector, that collector may report it to the credit bureaus, which will damage your credit.
How to stop the fees and bring your account back to positive
The fastest way to stop overdraft fees is to deposit money into your account immediately. Once your balance is positive again, no more overdraft fees will be charged. If you have already been charged fees, contact your bank and ask if they will reverse them — many banks will reverse one or two fees per year if you have a good history with them.
If you cannot deposit money right away, call your bank and ask about a courtesy overdraft reversal. Some banks offer this once per year or once every few years. Explain that you made a mistake and ask if they can waive the fee. There is no may provide they will, but asking costs nothing.
If your account has been negative for weeks or months and you have not paid it back, the bank may close your account and send the debt to a collection agency. At that point, you will owe the original negative balance plus collection fees, and the debt may appear on your credit report.
Overdraft protection as an alternative to overdraft fees
Overdraft protection is a service that links your checking account to another account — usually a savings account, money market account, or credit card — so that if your checking account goes negative, money is automatically transferred from the linked account to cover the shortfall.
If you link a savings account, the bank transfers money from savings to checking automatically, usually for a small fee of $5 to $10 per transfer. This is much cheaper than an overdraft fee. If you link a credit card, the bank may charge a cash advance fee instead, which is typically 3% to 5% of the amount transferred.
Overdraft protection prevents your debit card from being declined and stops overdraft fees from piling up. However, it only works if you have money in the linked account. If both accounts are empty, overdraft protection cannot help, and you will still be charged an overdraft fee.
When a bank closes your account for repeated overdrafts
Banks can close your checking account if you overdraft too many times or if you do not pay back a negative balance. There is no legal limit on how many overdrafts trigger a closure — it depends on the bank's policy. Some banks close accounts after five overdrafts in a month. Others tolerate more.
When a bank closes your account, you lose access to your debit card and any automatic payments linked to that account. If you have direct deposit set up, your paycheck will be rejected and returned to your employer. You will need to set up a new account at a different bank and update your employer's records.
A closed account for overdrafts is reported to ChexSystems and will make it harder to open a new account elsewhere. Some banks specialize in second-chance checking accounts for people with ChexSystems records, but these accounts often come with higher fees and lower spending limits.
Frequently Asked Questions
Can a bank charge me an overdraft fee if I only went negative for a few minutes?
Yes. Most banks charge an overdraft fee the moment your balance goes negative, regardless of how long it stays that way. A few banks have a grace period of a few hours, but this is rare. Check your account agreement or call your bank to find out their specific policy.
What is the difference between an overdraft fee and a non-sufficient funds fee?
An overdraft fee is charged when the bank covers a transaction and your balance goes negative. A non-sufficient funds (NSF) fee is charged when the bank declines a transaction because you do not have enough money. The fee amount is usually the same, but NSF fees only apply to declined transactions.
If I pay back the negative balance, will the overdraft fee be reversed?
Not automatically. However, many banks will reverse one or two overdraft fees per year if you ask. Call your bank and explain the situation. If you have been a customer for a long time and this is your first overdraft, they are more likely to help.
Can I be arrested or sued for having a negative checking account?
No, you cannot be arrested for a negative checking account. However, if the bank sends your unpaid balance to a debt collector and you ignore collection attempts, the collector may sue you in small claims court. If you lose, the court can order you to pay the debt plus court costs.
How long does a negative balance stay on my ChexSystems record?
A negative balance can stay on your ChexSystems record for up to five years. You can request a copy of your ChexSystems report for free at annualchexsystems.com to see what is listed. If there is an error, you can dispute it.