Life happens and not always kindly. You certainly wouldn’t be the first to overdraw your checking account, and definitely you won’t be the last. Many people have had it happen to them, particularly in tough economic times.
It’s probably going to cost you some money in the way of overdraft fees, however, and this can feel like a kiss of death if you’re already living on the financial edge. Bankrate reported in 2019 that the average overdraft fee, also known as an NSF fee, was $33.36 at that time. But paying the fee might not be inevitable, even if your bank initially tells you that it is. The matter is often negotiable, so it can’t hurt to try.
What Is an Overdraft Fee?
In simplest terms, an overdraft happens when transactions are presented to your bank account for payment, and your available balance isn't enough money there to cover all of them. At least one of them is going to result in a negative balance. Your bank will most likely charge you an overdraft fee – somewhere in the neighborhood of Bankrate’s reported $33.36 – and this will reduce your balance even more.
You can be charged that overdraft fee for each transaction that’s presented for payment. Let's say there are three transactions, and one check clears, but there’s not enough left in your account after it does, so another check “bounces,” too. Now you're charged two overdraft fees, one for the debit and one for the check.
Some banks put caps on how many times this can happen on a given day when your account has insufficient funds, but the limit isn’t particularly comforting since it can be as many as seven times.
How Kind Are the Top Banks?
So how generous and forgiving is your bank when this kind of mishap occurs? Bank of America reportedly won’t hit you with an overdraft fee for debit card and ATM transactions as of 2020, but it will charge you $35 for each check (up to four) that hits your account in a single day, and that can’t be covered by your balance – at least if it overdraws you by more than $1. Overdrafts less than a dollar are forgiven.
Wells Fargo Bank’s overdraft fee is the same: $35 each for up to three checks or debits hitting your account. But there’s no overdraft fee on debit card transactions unless you enroll to have the bank honor them even though there’s not sufficient money in your account. And Wells Fargo offers the “Overdraft Rewind” program. You can sign up to spare yourself the overdraft fee. The bank will automatically review the situation the next business day if you regularly have direct deposits made to your account.
Chase Bank’s overdraft fee is a dollar less – $34 – and you have $5 in wiggle room here. You can overdraw by up to this much without incurring a fee. And Chase doesn’t impose an overdraft fee on debit card transactions either unless you enroll to have the bank honor them even though there’s not sufficient money in your account. Chase’s limit is three overdraft fees per day.
Overdrawing your account at PNC Bank can be costly. It will run you $36 for each transaction that’s presented for payment, up to four, but it also waives fees on debit card transactions unless you enroll for coverage to have them paid.
Some banks are reportedly offering more breathing room during the 2020 coronavirus pandemic. Not all are revising their fee schedules and broadcasting the news, but several have quietly indicated that they’re relaxing their rules for a period of time. Ally, an online bank, waived all overdraft fees from March through July, and Bank of America has indicated that it’s open to discussing the situation if you call. Wells Fargo, Capital One, HSBC, PNC and BBVA Bank have also invited customers to reach out for help.
Tip #1: Mind Your Manners
Take a deep breath before you make that phone call and ask your bank to waive or refund your overdraft fees. You’re probably upset, and understandably so, but the individual you speak to is most likely a customer service representative who isn’t personally responsible for your dilemma.
Explain your problem calmly and succinctly. The representative doesn’t want to hear every painful, intimate detail about how your account became overdrawn. It’s sufficient to simply state that you’ve somehow overdrawn your checking account. Keep the emotion out of it. Think of it this way: Are you more inclined to want to help someone who’s yelling at you or someone who’s calmly asking you for assistance? Customer service reps are human, too.
Tell the representative what you’d like the bank to do for you, or consider asking them what your options are for relief.
Tip #2: Go Higher Up
You might hit what appears to be a brick wall at this point. It’s entirely possible that the customer service rep can’t offer you a resolution – they’re just not that high up on the food chain, and they’re not authorized to do so. They might respond with something along the lines of, “Sorry, no, I can’t do that.”
Don’t give up. This doesn’t necessarily mean that your effort has failed yet. Ask – calmly and politely, of course – to speak to the worker’s supervisor or someone who does have the authority to waive or refund fees.
Tip #3: Remind Them How Awesome You Are
This might be your option of last resort if your call has been passed on to a higher authority who just won't work with you. Remind the individual that you’ve been an excellent customer for years. Maybe you’ve rarely, if ever, overdrawn your bank account before. Tell them this, and that you’re considering taking your money to another bank. They probably don’t want to lose a customer over $35 or $70, particularly if you don’t have a history of this sort of thing happening in the past.
If Nothing Works
There’s no guarantee that you won’t come up empty, even if you’re excruciatingly polite, talk to someone in authority, and you’ve always been a good customer. But you have one more option if this happens.
Read More: How to Open a Bank Account in the USA
You can always make good on your threat to change banks. Bankrate indicates that at least two online banks – Varo Money and Chime – will forgive overdrafts up to a certain dollar limit, and most banks offer some kind of overdraft protection as well. This usually comes at a cost, but it can pay to shop around for the bank with the best overdraft policies just in case this ever happens again.
- Harvest: How to Get Overdraft Fees Refunded
- Bankrate: Attention, Bank Fee Haters – Here’s How to Get Your Money Refunded and Prevent the Next Overdraft Fee
- Possible Finance: 7 Banks with Overdraft Fees and How You Can Get Them Waived or Refunded
- Money: I Got My Bank to Waive Overdraft Fees in 5 Minutes. Here’s How
- U.S. News & World Report: These Banks Are Waiving Overdraft Fees Because of the Coronavirus
- Wells Fargo: Wells Fargo Overdraft Rewind
- Consumer Financial Protection Bureau. "A Closer Look: Overdraft and the Impact of Opting-In," Page 1. Accessed March 27, 2020.
- Consumer Financial Protection Bureau. "A Closer Look: Overdraft and the Impact of Opting-In," Page 4. Accessed March 27, 2020.
- National Credit Union Administration. "Overdraft and Non-Sufficient Funds (NSF) Fees." Accessed March 27, 2020.
- Board of Governors of the Federal Reserve System. "Federal Reserve Announces Final Rules Prohibiting Institutions From Charging Fees for Overdrafts on ATM and One-Time Debit Card Transactions." Accessed March 27, 2020.
- U.S. Government Publishing Office. "The Overdraft Protection Act of 2009." Accessed March 27, 2020.
- Consumer Financial Protection Bureau. "A Closer Look: Overdraft and the Impact of Opting-In," Page 2. Accessed March 27, 2020.
- Consumer Financial Protection Bureau. "You’ve Got Options When It Comes to Overdraft," Page 1. Accessed March 27, 2020.
- Ally Financial. "Bill Pay FAQs." Accessed March 27, 2020.
- Consumer Financial Protection Bureau. "You’ve Got Options When It Comes to Overdraft," Page 2. Accessed March 27, 2020.
- Commonwealth of Massachusetts. "Consumer Alert: Overdrawn Accounts." Accessed March 27, 2020.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.