The Best Strategy Is to Avoid Fees Altogether

Overdraft fees can feel like a heavy blow, especially if you’re already struggling financially. Even when money isn’t tight, those fees are frustrating and costly. Banks often limit the number of overdraft fees they charge in one day, but the fees can add up quickly, especially if you frequently overdraft your account. According to a 2020 study, frequent overdrafters average about 11 overdraft or insufficient funds fees per year, generating billions in revenue for banks annually.

Luckily, if overdrafting isn’t a habit, you have a good chance of getting those fees waived, particularly if you know how to communicate with your bank effectively.

What Are Overdraft Fees?

An overdraft fee is charged when your bank covers a transaction that exceeds your available account balance. This can happen if you swipe your debit card, write a check, or have multiple transactions that together go beyond your funds. While some banks will simply reject the transaction and charge a non-sufficient funds fee instead, many will pay the transaction on your behalf and then charge you an overdraft fee.

For context, the average overdraft fee among major banks is around $34 per incident. Some banks may allow you to sign up for alerts, so you get notified by text or email if your account balance is low, helping you avoid unexpected fees.

How Overdraft Fees Work

Overdraft fees are charged for each transaction that causes your account to go negative. This means if you have several transactions on the same day that push your balance below zero, you could be charged multiple fees—sometimes nearing $200 in a single day, depending on your bank’s policies. Most banks have a cap on how many overdraft fees they charge in one day, but the costs can still be significant.

Banks like Ally and Capital One don’t charge overdraft fees at all, while others like Chase or Bank of America charge around $34 or $35 per overdraft, with varying daily maximums.

How to Get Overdraft Fees Refunded

If you discover an overdraft fee, the best course of action is to contact your bank as soon as possible. Call the customer service number on the back of your debit card or visit your bank’s website or mobile app to find the right contact info.

When speaking with the bank, politely explain that you noticed an overdraft fee and would like to have it removed. Providing context can help—whether it’s a delayed paycheck, an unexpected bill, or a temporary financial setback. If you’ve been a reliable customer who rarely overdrafts, mention that as well. Banks are often more willing to waive fees for customers with a good history.

Throughout the conversation, it’s important to stay calm and courteous. Customer service representatives are more likely to help if you’re polite, even if they initially seem reluctant to waive the fee.

Tips for Avoiding Overdraft Fees in the Future

Banks are less likely to waive fees if over drafting becomes a regular issue. To prevent overdrafts:

Make sure to deposit or transfer funds into your account before the daily cutoff time, ensuring pending transactions can be covered. Consider banking with institutions that don’t charge overdraft fees, like Ally, Capital One, or Discover. Signing up for low-balance alerts can give you early warning before your funds run out. Many banks offer overdraft protection, which transfers money from a linked account or credit card to cover shortfalls. Keep in mind, though, that some overdraft protection transfers may incur smaller fees or, if linked to a credit card, could be treated as cash advances with higher interest and fees.

Frequently Asked Questions

Overdraft fee reversals are discretionary, so banks aren’t obligated to waive fees, but many will for customers who don’t often overdraft. Overdraft fees are usually charged when a bank pays a transaction you don’t have enough funds to cover. Some banks delay the fee until the end of the day, giving you a window to make a deposit and avoid the charge altogether. For those seeking banks with the lowest overdraft fees, options include Ally Bank, Capital One, Discover, USAA, and online bank Chime, which charges no overdraft fee if you’re overdrawn by $200 or less.