Your bank will charge you an overdraft fee, usually $25 to $35 per transaction, and the negative balance will keep growing until you deposit money or the bank closes the account.

When you spend more than you have in your account, the bank covers the difference temporarily—but charges you for it. Each transaction that pushes you past zero triggers a separate overdraft fee. If you're negative by $50 and make three more purchases, you'll owe the bank $50 plus three overdraft fees, which can total $75 to $105 depending on your bank.

The negative balance itself does not accrue interest the way a credit card does, but the fees stack up fast. Some banks charge one fee per day instead of per transaction, which can be slightly cheaper if you make multiple purchases while negative. Others charge a "sustained overdraft fee" if you stay negative for more than a few days—usually another $25 to $35.

Key Takeaways

  • Each transaction that overdrafts your account triggers a separate fee, typically $25 to $35, and fees compound if you keep spending while negative.
  • Your bank will not automatically close your account after one overdraft, but repeated overdrafts over months can result in account closure and a report to ChexSystems, which blocks you from opening accounts elsewhere.
  • Overdraft protection—linking a savings account or credit line to your checking account—prevents overdrafts but may charge a transfer fee instead of an overdraft fee.
  • If you cannot pay the negative balance within a few weeks, contact your bank to negotiate a fee waiver or payment plan before the account is closed.
  • Once your account is closed for overdrafts, you will need to pay the full negative balance plus all fees before you can open a new account at that bank.

How overdraft fees compound when you keep spending

The danger of a negative account is that you may not realize you're negative until several transactions have already posted. If your balance is -$20 and you swipe your debit card three times before checking, you'll be charged three overdraft fees on top of the original -$20, leaving you -$95 or more.

Banks process transactions in different orders—not always the order you made them. Some banks clear larger transactions first, which can trigger more overdraft fees than if they cleared them in the order you swiped. This practice, called "high-to-low posting," has been restricted by some banks but is still common. Check your bank's transaction posting policy in your account settings or by calling customer service.

If you have overdraft protection enabled, the bank will transfer money from a linked savings account or credit line instead of charging an overdraft fee. This prevents the fee but may charge a transfer fee of $1 to $5 per transfer. If you don't have overdraft protection and don't deposit money quickly, the fees will keep accumulating.

When your bank will close your account

A single overdraft will not close your account. Banks expect occasional overdrafts and will let you stay negative for a few days to a few weeks, depending on the bank's policy. However, if you overdraft repeatedly over several months—or if your negative balance stays unpaid for 60 days or longer—the bank will close the account.

When a bank closes your account for overdrafts, they report it to ChexSystems, a banking history database. This report stays on your record for five years and makes it very difficult to open a checking or savings account at another bank during that time. Some banks will still open accounts for people with ChexSystems records, but they often require a deposit or charge higher fees.

Before the bank closes your account, they will usually send you a notice—by mail or email—giving you 10 to 30 days to pay the negative balance. If you ignore the notice, the account closes and the bank may send your debt to a collection agency.

How to stop the overdraft fees from growing

The fastest way to stop fees is to deposit money immediately. Once your balance is positive again, no more overdraft fees will be charged. If you cannot deposit the full amount right away, deposit whatever you can to reduce the negative balance and prevent additional transactions from triggering more fees.

If you're unable to deposit money in time, contact your bank before the account is closed. Many banks will waive one or two overdraft fees if you call and ask, especially if you've been a customer for a while or if this is your first overdraft. Be honest about why you went negative—job loss, unexpected expense, or a mistake—and ask if the bank can remove the fees or set up a payment plan for the negative balance.

Some banks offer a "grace period" or "courtesy overdraft" that removes one overdraft fee per year or per account lifetime. Check your account agreement or ask your bank whether you have this benefit available.

Overdraft protection: how it works and whether it's worth it

Overdraft protection links your checking account to a savings account, money market account, or credit line. When a transaction would overdraft your checking account, the bank automatically transfers money from the linked account instead of charging an overdraft fee.

The transfer usually costs $1 to $5 per transfer, which is cheaper than a $25 to $35 overdraft fee. However, if you have overdraft protection enabled and you don't monitor your balance, you can drain your savings account without realizing it. Some people turn off overdraft protection specifically to force themselves to notice when they're running low on money.

If you link a credit line to your checking account for overdraft protection, the transfer counts as a cash advance, which usually charges a higher interest rate than regular credit card purchases. This is rarely worth it unless you're in a true emergency.

What to do if your account is already closed

If your bank has already closed your account, you must pay the full negative balance plus all overdraft fees before you can open a new account at that bank. The bank will not reopen the account until the debt is paid in full.

You can still use the closed account to receive direct deposits or transfers—money will go in, but you cannot withdraw it until the negative balance is cleared. If you have a paycheck coming, you can ask your employer to deposit it into the closed account, and the bank will automatically apply it to the negative balance.

Once the balance is paid, ask the bank to remove the ChexSystems report if this was your first closure or if you've had a long period of good standing since. Some banks will remove the report as a courtesy, though they're not required to. If the report stays on your record, you can still open accounts at banks that don't use ChexSystems, such as some credit unions or online banks that specialize in second-chance banking.

How to avoid going negative in the first place

Set up a low-balance alert on your phone or email so you know when your account drops below a certain amount—$100 or $200, depending on your spending. Most banks offer this for free through their app or online banking portal.

Keep a small buffer in your account—$50 to $100—that you don't spend. This cushion prevents accidental overdrafts from small transactions or timing delays between when you spend money and when the transaction posts to your account.

If you struggle to track your balance, switch to a debit card that declines transactions when you don't have enough money instead of allowing overdrafts. Some banks and credit unions offer this as an option, and it prevents overdraft fees entirely because the transaction simply won't go through.

Frequently Asked Questions

Can I get overdraft fees refunded if I call my bank?

Many banks will refund one or two overdraft fees if you call and ask, especially if you've been a customer for a while or if this is your first overdraft. The bank is not required to refund fees, but it's worth asking. Be polite and explain the situation—job loss, unexpected expense, or a mistake—and the bank may remove the fees as a courtesy.

Will going negative hurt my credit score?

An overdraft alone does not appear on your credit report and will not hurt your credit score. However, if the bank sends your debt to a collection agency because you don't pay the negative balance, that collection account will appear on your credit report and damage your score. Pay the negative balance before it reaches a collection agency.

What's the difference between an overdraft and a bounced check?

An overdraft means the bank covered the transaction and charged you a fee. A bounced check means the bank rejected the check because you didn't have enough money, and the check was returned to the person who tried to cash it. Bounced checks also trigger fees from both your bank and the recipient's bank.

Can I open a new bank account if my old one was closed for overdrafts?

You can open an account at a bank that doesn't use ChexSystems or at a credit union, which often have more lenient policies. However, you must pay the full negative balance and all fees from the closed account first. Some banks will still open accounts for people with ChexSystems records, but they may charge higher fees or require a deposit.

How long does a ChexSystems report stay on my record?

A ChexSystems report for a closed account stays on your record for five years. After five years, it is automatically removed. You can request a copy of your ChexSystems report for free at annualchecksystems.com to see what information is listed.