Overdraft fees are charges that occur when you dont have enough money in your account to cover your transactions. The cost of overdraft fees varies by bank, but they may cost around $35 per transaction. Some banks may also charge continuous overdraft fees or daily overdraft fees, which are charges assessed every day the account remains overdrawn. Overdraft fees can add up quickly and can have ripple effects that are costly.

In general, for debit card transactions at ATMs or at merchants, consumers must opt-in, or agree up front, that the bank can charge them an overdraft fee for any debit card transaction that overdraws the account. If you don’t opt-in, you can’t be charged a fee. However, your bank may refuse your purchase if it will overdraw your account. If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account. You will be charged any overdraft fees that are incurred as a result.

Banks may offer overdraft protection, which is an agreement with the bank or financial institution to cover overdrafts on a checking account. This service typically involves a fee and is generally limited to a preset maximum amount. Banks are not required to offer any overdraft protection programs, and even when they do, they may retain discretion to pay or not pay a particular overdraft transaction.

To avoid overdraft fees, you can link your savings account to your checking account when your bank provides this option. If you overdraw your checking account, the bank can pull funds from your savings to cover the shortage, as long as you have sufficient funds in your savings account. You can also monitor your account balance regularly and set up alerts to notify you when your balance falls below a certain amount.

In summary, overdraft fees are charges that occur when you dont have enough money in your account to cover your transactions. They can add up quickly and can have ripple effects that are costly. To avoid overdraft fees, you can link your savings account to your checking account, monitor your account balance regularly, and set up alerts to notify you when your balance falls below a certain amount.