It’s important to keep track of the funds in your bank accounts so you don’t accidentally use more than what you have available. Your bank could even hit you with an overdraft fee if you overdraw your account. But it’s not always easy to monitor your account balance when you have bills to pay and essential purchases to make.
Did you know that if you get charged overdraft fees, you can ask your bank to waive them? It’s not a guaranteed solution, but many banks are willing to work with you so they can continue receiving your business.
In this guide, you’ll learn how to get your bank to waive overdraft fees and how you can avoid overdraft fees in the first place. We’ll also share some info about banks that don’t even charge overdraft fees. This will help you understand whether it’s worth it to continue with your bank or switch to a different one.
What are overdraft fees?
According to a report from the Center for Responsible Lending about the high costs of overdraft fees, big banks collect more than $11 billion in overdraft-related fees each year. With that big of a number, it’s likely no surprise why a bank charges overdraft fees. Banks are businesses and they need to make money — and these types of fees are helping them do that.
Fortunately, you can avoid these bank fees and get them waived by understanding how overdraft fees work and how to approach the subject with your financial institution.
Overdraft fees are charges from banks or credit unions that typically occur when you don’t have enough money in your bank account to cover a transaction, so your bank covers it instead. These charges can be quite hefty, often reaching more than $30 per overdraft.
Here are a few examples of what a typical overdraft fee costs at three major banks:
- Chase: Charges $34 for each overdrafted item. This is limited to three times per day, or $102 total per day.
- Wells Fargo: Charges $35 for each overdrafted item. This is limited to three times per day ($105 total per day) for consumer accounts and eight times per day ($280 total per day) for business accounts. Wells Fargo Teen Checking accounts are subject to overdraft fees of $15 per item, with a limit of two overdrafts or $30 total per day.
- U.S. Bank: Charges $36 per item if the overdraft is for more than $5. If the overdraft is less than $5, you aren’t charged an overdraft fee. Overdraft fees are limited to four overdraft fees or $144 per day.
How do overdraft fees work?
Say you have $25 in your checking account, but you accidentally make a debit card purchase of $50. Your bank may accept the transaction and cover the extra $25, but you’ll likely incur an overdraft fee for this service. You’ll then typically have five-to-eight business days to pay off the negative balance, or you could be charged an additional fee, called an extended overdraft fee.
An overdraft fee shouldn’t be confused with an insufficient funds fee or non-sufficient funds fee (NSF). An NSF can also be charged when your account is overdrawn, or you spend more money than what’s available in your account, but the transaction typically won’t clear because your bank isn’t covering the difference.
So using the same example above, you could try to make the same $50 debit card purchase with only $25 in your checking account. This time, however, your bank would decline the debit card transaction and you’d be charged an NSF fee instead of an overdraft fee.
You get charged a fee in both scenarios, but the circumstances are different because the bank is either accepting or declining your transaction.
It’s important to note that overdraft fees typically occur only if you’ve opted into your bank account’s overdraft protection service:
- If you opt into overdraft protection, it allows you to make certain transactions that overdraw your account without the transaction being declined by your bank. But these programs also typically come with overdraft fees.
- If you decline overdraft protection, you’ll likely avoid overdraft fees, but any transaction that overdraws your account will likely be denied and you might be charged NSF fees.
How to waive your overdraft fees in 5 steps
Getting your bank or credit union to waive overdraft fees can be as simple as calling and asking. Many of the best banks want to keep your business, especially if you've been a loyal customer, so it’s in their best interests to help in these situations.
Here are five steps to walk you through the process of getting your bank to potentially waive your overdraft charges:
1. Organize your personal info
As a matter of security, most banks will need to verify certain information before they can pull up the correct account and talk to you about it. Having this information on hand before speaking with a bank representative can make the process quicker and easier.
Here are a few things you might be asked to verify by a bank or credit union employee:
- Full name
- Bank account number
- Social Security number
- Home address
- Phone number
2. Call your bank or credit union
Once you have the information you need, give your bank or credit union a call. Or you could head to your local branch and talk to a representative in person.
It’s typically recommended that you go the phone route because it’s easier to call in again and talk to a different representative. This strategy can be useful if a certain employee isn’t budging on their stance to help waive overdraft fees for you.
If you need the phone number for your bank or credit union, do a quick online search for the name of your financial institution plus “phone number.” This should pull up a customer service number or the contact page where you can find the right number.
You shouldn’t have to call a specific department to talk about waiving your overdraft fees. Any general customer service agent should be able to help you, though they may need some assistance from a supervisor.
3. Make the request and your case
If you’re nervous about making this request and trying to negotiate something in your favor, practice the conversation in your head before you call. It may sound silly, but practicing, even talking out loud, can help get rid of some of your nerves.
Once you have a customer service agent on the line, plead your case and make your request. Make it clear you’ve been charged overdraft fees, and you’d like them waived. Be calm and polite, but make sure you don’t exaggerate beyond the truth.
If you’ve been a good customer for a long time, let the agent know. In addition, talk about how you could use some temporary help for a unique and difficult situation, as long as that’s the truth and how you would describe it. If you haven’t had fees waived before and you have a good banking history, you might have a better chance to have your overdraft fees waived. Make sure the representative knows if it’s the first time you’ve ever been charged a bank overdraft fee.
The representative may initially tell you they aren’t able to waive your fees, but explaining your situation and then making the request again may prove successful.
4. If you get denied, ask to speak to a supervisor
If the representative continues to decline to waive your overdraft fees, politely ask to speak with a supervisor. A rep may not be able to or want to waive your fees for various reasons, but a supervisor can sometimes be more helpful.
The original agent may speak with a supervisor and get the go-ahead themselves or you might end up on the phone with the supervisor. If you have to speak to a supervisor, politely explain the situation and make the request to have your overdraft fees waived.
Remember to explain the things you may have already explained to the earlier representative. Bring up true aspects of your situation and experience. If this hasn’t happened to you in the past, let the supervisor know this is the first time. If things have become more financially difficult for you for a reason beyond your control, that’s something you could bring up as well.
Unfortunately, if you’ve had overdraft fees waived before, the supervisor may not be able to help you and you might have to pay these new fees.
5. Hang up and try again
If a phone call doesn’t go over well, you’re always able to hang up and call again. The goal would be to speak with someone else. It may not make sense, but simply talking to another agent might be the solution to waiving overdraft fees from your bank. Customer service agents are human and make their own decisions, so hopefully another agent is more willing to help.
If going the phone route doesn’t seem to work, you could try going to your local branch. It may be more nerve-wracking to negotiate these fees in person, but it’s up to you to decide whether it’s worth it to try.
How to avoid future overdraft fees
Here are a few important tips if you want help to avoid overdraft fees in the future:
- Monitor your balance. If you make a practice of carefully monitoring your account balance, it’s harder for an overdraft to occur. You should know how much money is in your account and when you need to stop spending until your next deposit is made. But this strategy isn’t foolproof because you can’t always know the timing of charges, automatic payments, and deposits at your bank.
- Keep a high balance. Checking accounts aren’t typically the best investment options for loads of money because they don’t often earn interest rates. But keeping more money than you need in your account could help offset the risk of an overdraft.
- Enable notifications. If your financial institution has this feature, enable account notifications for important events related to your checking account. This could include getting an alert when your balance drops below a certain amount or knowing when a check posts.
- Decline overdraft protection. You may already be enrolled in overdraft protection with your bank, which potentially subjects you to overdraft fees if your account is overdrawn. If you don’t want to pay these fees, contact your bank to opt out of its overdraft protection program.
- Link an account to cover overdrafts. If your bank allows it, you may be able to link another account to cover any possible overdrafts on your checking account. This could include linking a savings account or personal line of credit. This way the transaction won’t be denied, as long as your backup account has the necessary funds or credit, and you won’t be charged an overdraft fee.
The best way to avoid overdraft fees
If you don’t want to get hit with overdraft fees, get a checking account that doesn’t charge any. Overdraft fees are typically charged by many traditional banks because it’s a strategy that often favors the bank over the consumer. This is because big banks are making billions of dollars from these types of fees while their customers are fronting the bill.
If you want an account that doesn’t have overdraft fees, check out our list of the best checking accounts. For example, Chime not only offers the ability for you to get your paycheck up to two days early, but the Chime SpotMe feature also covers any accidental overdrafts up to $200 so your purchases aren’t declined and you aren’t charged an overdraft fee. Chime doesn’t charge any monthly maintenance fees either. 2 , 4 , 1 , 3
Why are overdraft fees so high?
Overdraft fees are likely so high because banks make billions of dollars from these types of charges. Unfortunately, many banks aren’t likely to lower their fees. But if you go with a financial institution like Chime, you can get help avoiding fees. For example, the Chime SpotMe feature allows you to overdraft up to $200 with no overdraft fees. To learn more about Chime, check out our Chime review. 1 , 3
Is it legal for banks to charge overdraft fees?
It’s legal for banks to charge overdraft fees as long as you opt into their overdraft protection programs. Because you can opt out of these programs, you get to choose whether you potentially have to pay overdraft fees or not. If a bank doesn’t allow you to opt out of its overdraft protection program, it’s likely illegal for it to charge you overdraft fees.
Do overdraft fees affect credit?
An overdraft fee itself won’t affect your credit score, but not paying the fee could have a negative impact. Checking accounts aren’t typically included on your credit report because you aren’t borrowing money, or credit, from a lender as you would be with a loan or credit card.
But if you don’t pay the overdraft fee and negative balance back to your bank, your debt could be sent to collections. Collections accounts show up on your credit report and could have a negative impact on your credit.
It’s not the most fun part of personal finance to deal with overdraft fees from your bank. The fees are generally high and can make it feel like the relationship with your bank is one-sided. Fortunately, getting a refund on these fees might be as simple as asking for one.
But just as with late fees or ATM fees, the best way to avoid paying an overdraft fee is to go with a bank that doesn’t charge them. More banks are breaking away from traditional and outdated strategies and focusing their efforts on creating a comfortable and easy experience for their customers. Many new bank accounts don’t come with overdraft fees, so if you find yourself paying them, making a change could be the right move for you.
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