Yes, your checking account can go negative, and the bank will charge you for it
A checking account goes negative when you spend more money than you have in it. This can happen in a few ways: you write a check for more than your balance, you make a debit card purchase that exceeds what you have, or you set up an automatic payment that drains the account. When this happens, your bank will either decline the transaction or allow it to go through and charge you an overdraft fee.
Whether the transaction goes through or gets rejected depends on whether you have overdraft protection set up with your bank. Without it, most transactions will be declined at the point of sale or ATM. With it, the bank covers the shortfall but charges you a fee — typically $25 to $35 per overdraft, though some banks charge more. You can end up with multiple overdraft fees in a single day if several transactions post at once.
The key thing to understand is that going negative is not automatic rejection — it is a choice your bank makes about whether to cover you, and they charge you for making that choice.
Key Takeaways
- Your bank can allow your account to go negative if you have overdraft protection turned on, but will charge you an overdraft fee each time it happens.
- Without overdraft protection, most transactions will be declined rather than allowed to overdraw, though some banks still charge a fee for the attempt.
- Multiple transactions can trigger multiple overdraft fees on the same day if they all post while your account is negative.
- You can turn overdraft protection off in your bank's app or by calling customer service to prevent overdrafts entirely.
- Some banks offer overdraft grace periods or waive one fee per year, but these vary widely and are not may provide.
How overdraft protection works
Overdraft protection is a service that lets your bank cover transactions even when your balance is too low. When you attempt a purchase and do not have enough money, the bank pays the difference and charges you a fee. This is different from a declined transaction — the purchase goes through, but you owe the bank money plus the overdraft fee.
Overdraft protection is usually turned on by default at most banks, though some require you to opt in. You can check whether you have it by logging into your bank's app or website, calling customer service, or visiting a branch. The setting is typically found under account settings or protection options.
If you have overdraft protection and your account goes negative, you will see the overdraft fee appear on your statement within a day or two. The fee is separate from the amount you overdrew — if you overdrew $50 and the fee is $35, you now owe $85 plus whatever you spent the $50 on.
What happens without overdraft protection
If you turn off overdraft protection, your bank will decline most transactions when your balance is too low. A debit card purchase will be rejected at the register. An ATM withdrawal will not go through. A check you write may be returned unpaid, though your bank may still charge you a fee for the attempt.
Some banks charge a fee even for declined transactions — called an "insufficient funds fee" or "non-sufficient funds fee" — though this is less common than overdraft fees. The fee is usually smaller, around $10 to $15, but you should check your bank's fee schedule to be sure.
Turning off overdraft protection means you cannot accidentally spend money you do not have, but it also means your transactions may fail at inconvenient times. Some people prefer this; others prefer the safety net of overdraft protection and accept the occasional fee.
How to turn off overdraft protection
Most banks let you disable overdraft protection through their mobile app or website. Look for account settings, protection options, or overdraft settings. The exact location varies by bank, but it is usually a toggle or checkbox you can switch off.
If you cannot find it online, call your bank's customer service line — the number is on your debit card or bank statement. Tell them you want to opt out of overdraft protection. They can turn it off immediately over the phone, and you should receive confirmation in writing or by email.
Once you turn it off, new transactions will be declined if your balance is too low. Existing negative balances will still need to be paid back, but you will not incur new overdraft fees going forward.
Multiple overdraft fees in one day
One of the most frustrating aspects of overdraft protection is that you can be charged multiple fees in a single day. This happens because banks often process transactions in a specific order — usually largest to smallest, or in the order they were authorized — rather than the order you made them.
For example, if you have $100 in your account and make a $60 purchase, a $30 purchase, and a $20 purchase, the bank might process the $60 first, then charge an overdraft fee. Then the $30 goes through, triggering another fee. Then the $20, triggering a third fee. You end up owing $110 in purchases plus $75 to $105 in overdraft fees, depending on your bank's fee amount.
Some banks cap the number of overdraft fees you can be charged in a day — often at three or four — but not all do. Check your bank's fee schedule or call customer service to find out what their limit is, if they have one.
Overdraft grace periods and fee waivers
Some banks offer an overdraft grace period, which gives you a set amount of time — usually 24 to 48 hours — to bring your account back to a positive balance before the overdraft fee kicks in. If you deposit money or transfer funds in time, the fee is waived.
Other banks offer one free overdraft fee per year or per statement cycle, meaning the first time you overdraw, you do not pay a fee. After that, standard fees apply. A few banks waive overdraft fees for customers who maintain a certain minimum balance or have direct deposit set up.
These policies vary widely and change frequently. If overdraft fees are a regular problem for you, it is worth calling your bank to ask what options they offer. You may also want to consider switching to a bank with a more customer-friendly overdraft policy.
Paying back a negative balance
Once your account goes negative, you need to deposit enough money to cover both the overdraft amount and any fees. The bank will not close your account or take legal action for a small overdraft, but they may eventually close it if the negative balance persists for weeks or months.
If you cannot pay back the full amount right away, contact your bank and explain your situation. Some banks will work with you on a payment plan or waive fees if you are a long-standing customer. Others will not negotiate, but it never hurts to ask.
Once you pay back the negative balance, your account returns to normal. The overdraft will show up on your bank statement and in your transaction history, but it will not affect your credit score — overdrafts are not reported to credit bureaus.
Frequently Asked Questions
Will a negative checking account hurt my credit score?
No. Overdrafts and negative balances do not appear on your credit report and do not affect your credit score. However, if your bank sends your account to a collection agency after months of non-payment, that collection account will hurt your credit. Paying back the overdraft before it reaches that point keeps your credit clean.
Can my bank close my account if I go negative?
Yes, banks can close accounts for repeated overdrafts or for balances that stay negative for an extended period. If your account is closed, you may also be reported to ChexSystems, a banking history database that makes it harder to open accounts at other banks. Pay back the negative balance as soon as you can to avoid this.
What is the difference between overdraft protection and overdraft fees?
Overdraft protection is the service that allows your account to go negative. Overdraft fees are what the bank charges you for using that service. You can have overdraft protection turned on but still avoid fees by keeping your balance positive.
Can I dispute an overdraft fee?
Yes. Call your bank and explain why you think the fee should be waived — for example, if the overdraft was caused by a bank error, or if you have been a customer for many years with no prior overdrafts. Banks often waive one or two fees per year if you ask politely. There is no may provide, but it is worth trying.
What should I do if I keep overdrawing my account?
Turn off overdraft protection so transactions are declined instead of charged. Set up low-balance alerts in your bank's app so you get notified when your balance drops below a certain amount. Consider switching to a bank that offers overdraft grace periods or fee waivers. You can also ask your bank about linking a savings account to your checking account for automatic transfers when the balance gets too low.