Your bank will charge you an overdraft fee, usually $25 to $35 per transaction, and the negative balance will stay on your account until you deposit money to cover it

When you spend more money than you have in your account, the bank covers the difference temporarily. That coverage is not free. You will owe the bank a fee for each transaction that pushed you into the negative — sometimes called an overdraft fee or nonsufficient funds (NSF) fee. The exact amount varies by bank, but most charge between $25 and $35 per overdraft event. Some banks charge multiple fees in a single day if several transactions post while your account is negative.

The negative balance itself does not disappear. Your account will show a minus sign next to the amount until you deposit enough money to bring it back to zero or positive. During that time, any new transactions may also trigger additional overdraft fees. The longer your account stays negative, the more fees can stack up.

Key Takeaways

  • Each overdraft transaction typically costs $25 to $35, and multiple transactions in one day can result in multiple fees.
  • Your account remains negative until you deposit money to cover both the original overspend and any fees the bank charged.
  • Some banks offer overdraft protection, which links your checking account to savings or a credit line to prevent overdrafts entirely.
  • You can request a fee reversal if this is your first overdraft or if the bank made an error, though banks are not required to grant it.
  • Repeated overdrafts may result in your account being closed and reported to ChexSystems, making it harder to open accounts elsewhere.

How overdraft fees are calculated and when they hit your account

Overdraft fees are not charged at the moment you overspend. Instead, they post when the transaction actually settles with the bank — which can be hours or days after you made the purchase. This delay is why you might see your account go negative unexpectedly: a debit card purchase, check, or automatic bill payment clears after other transactions you made earlier, and suddenly you are below zero.

Banks also control the order in which they process transactions, and this order matters. Many banks process transactions from largest to smallest, or in the order they received them, rather than in the order you made them. This practice can create more overdrafts than would occur if transactions posted in the order you actually spent the money. For example, if you have $100 in your account and make a $60 purchase and a $50 purchase on the same day, the bank might process the $60 first, leaving you with $40, then process the $50, triggering an overdraft fee — even though you made the smaller purchase first.

Some banks charge one overdraft fee per day, while others charge one per transaction. If you make five purchases while your account is negative, you could face five separate fees. A few banks cap the total overdraft fees you can incur in a single day, but this varies widely.

Overdraft protection and how to prevent overdrafts

Overdraft protection is a service that prevents your account from going negative by automatically transferring money from another account or credit line when you overspend. If you link your checking account to a savings account, the bank will pull from savings to cover the shortfall. If you link it to a credit line or overdraft line of credit, the bank will lend you the money instead. Either way, you avoid the overdraft fee on the transaction itself.

However, overdraft protection is not free. If the bank transfers money from your savings account, you may pay a transfer fee. If the bank uses a credit line, you will pay interest on the borrowed amount. These costs are usually lower than overdraft fees, but they add up if you rely on overdraft protection regularly. You have to opt into overdraft protection — it is not automatic — and you can turn it off at any time through your bank's website or by calling customer service.

The simplest way to prevent overdrafts is to monitor your balance regularly and set up low-balance alerts. Most banks let you set a threshold — say, $200 — and send you a text or email when your balance drops below it. This gives you time to deposit money or postpone a purchase before you actually overspend. You can also use your bank's mobile app to check your balance before making a large purchase.

What happens if you cannot pay back the negative balance

If you do not deposit money to cover your negative balance, the bank will eventually close your account. The timeline varies: some banks close accounts after 30 days of being negative, others wait 60 or 90 days. Before closing the account, the bank will usually send you a notice and may attempt to collect the debt through phone calls or letters.

Once the account is closed, the bank may sell the debt to a collection agency or pursue collection on its own. You will owe not just the original negative balance but also all the overdraft fees that accumulated. If the amount is large enough, the bank or collection agency may file a lawsuit and attempt to garnish your wages or seize money from another account you have.

Closed accounts are reported to ChexSystems, a banking history database that most banks check before opening new accounts. A closed account for non-payment can make it very difficult to open a checking or savings account at another bank for several years. Some banks offer second-chance accounts specifically for people with ChexSystems records, but these accounts often come with higher fees and lower limits on deposits and withdrawals.

How to request an overdraft fee reversal

Banks are not required to reverse overdraft fees, but many will do so if you ask — especially if this is your first overdraft or if you have been a customer for a long time. Call your bank's customer service line and explain the situation. Be honest: if you made a mistake or did not realize a transaction was pending, say so. If the bank made an error — for example, if it processed transactions out of order in a way that created an unnecessary overdraft — mention that too.

The person on the phone may have the authority to reverse one or two fees on the spot. If they do not, ask to speak with a supervisor or manager. Some banks have a formal dispute process for overdraft fees, and you may need to submit a written request. Keep records of all communication with the bank, including the date, time, and name of the person you spoke with.

Your chances of getting a reversal are higher if you act quickly — within a few days of the overdraft — and if you have a clean account history. Banks are more likely to help customers who rarely overdraft than customers with a pattern of repeated overdrafts.

Overdraft fees and your credit report

Overdraft fees themselves do not appear on your credit report, and they do not directly affect your credit score. However, if your account goes to collections because you did not pay back the negative balance, that collection account will appear on your credit report and will damage your score significantly. A collection account can stay on your report for up to seven years.

Additionally, if a bank closes your account due to non-payment and reports it to ChexSystems, future banks will see that record when you try to open a new account. This is separate from your credit report but can be just as damaging to your ability to access banking services.

Overdraft fees and checking accounts with no overdraft coverage

Some banks and credit unions offer checking accounts that simply decline transactions if you do not have enough money to cover them. These accounts do not allow overdrafts at all, so you cannot go negative and cannot be charged an overdraft fee. Instead, your debit card will be declined, or a check will bounce. A bounced check may result in a returned-check fee from your bank (usually $15 to $25) and a fee from the merchant or person who tried to cash it, but you will not owe money to the bank.

These no-overdraft accounts are often called basic checking or second-chance checking accounts. They may have other limitations, such as a cap on the number of debit card transactions per month or a monthly fee, but they eliminate the risk of overdraft fees entirely. If you have a history of overdrafting, switching to a no-overdraft account can protect you from accumulating more fees.

Frequently Asked Questions

Can a bank charge me multiple overdraft fees in one day?

Yes. If you make multiple transactions while your account is negative, each one may trigger a separate overdraft fee. Some banks cap the total fees you can incur in a single day, but this varies. Check your bank's overdraft policy or call customer service to find out their specific rules.

Will my overdraft show up on my credit report?

The overdraft itself does not appear on your credit report. However, if the negative balance goes unpaid and is sent to collections, the collection account will appear on your report and harm your credit score. Overdraft fees also do not directly affect your score.

What is the difference between overdraft protection and overdraft fees?

Overdraft protection prevents overdrafts by automatically transferring money from another account or credit line. Overdraft fees are charges the bank imposes when you do go negative. With protection, you may pay a transfer or interest fee instead of an overdraft fee — usually a lower cost.

Can I dispute an overdraft fee?

You can request a reversal, especially if it is your first overdraft or if the bank made an error. Call customer service and ask politely. Banks often reverse one or two fees for customers with good history, but they are not required to do so.

What happens if I ignore a negative balance on my account?

The bank will eventually close your account, usually after 30 to 90 days. You will owe the negative balance plus all accumulated overdraft fees. The bank may send the debt to collections, which can result in wage garnishment and will damage your credit for years.