At the point when you’re encountering monetary difficulty, getting hit with overdraft charges can be destroyed, both sincerely and monetarily. An overdraft fee is a hassle even when things are going well.
Even if banks limit the number of overdraft fees they charge in a single day, the fee can still be quite pricey, especially for people who overdraw frequently. According to a 2020 study by research company Oliver Wyman, frequent overdrafts pay an average of 11 overdraft or insufficient funds fees (NSF).
Overdraft and NSF fees cost banks $17 billion annually, but you can avoid paying overdraft fees if you don’t frequently overspend your checking account. You might be able to avoid overdraft fees in the future if you have a better understanding of when banks charge them. Knowing how to contact your bank can reduce or even eliminate overdraft fees in the rare event that you overspend.
How do Overdraft Fees Work?
Your bank charges an overdraft expense when it pays for an exchange even though you need more cash in your record to cover the exchange. If you use your debit card or write a check for more money than your checking account can hold, you risk an overdraft. Having various exchanges hit your record around the same time can likewise endanger you causing different overdraft expenses.
Instead of covering the purchase for you and charging an overdraft fee, the bank might return the transaction to the merchant and charge you non-sufficient funds or insufficient funds fee.
How do fees for overdrafts work?
Depending on your bank, overdraft fees can be quite costly, costing close to $40 per incident. The cost need not necessarily come as a surprise. If your account is overdrawn, you can sign up for alerts from some banks that will notify you via text, email, or mobile device. When you look at your online transaction history or your billing statement, you might also notice the fee. The transaction that led to the overdraft fee might be recorded in your online account.
Overdraft fees are assessed per transaction, so if you have multiple transactions posted to your account after going overdrawn, your bank may charge you multiple fees on the same day. Overdraft fees can cost you nearly $200 in a single day, depending on the bank.
How to Refund Overdraft Fees If you’ve been charged an overdraft fee, you might be able to get it back in a few simple steps, provided that you don’t do it again.
Make a phone call to your bank as soon as you discover that you have been charged an overdraft fee. On the back of your debit card, on the bank’s website, or in your mobile app, you can quickly find the number.
Make Your Request Inform the bank that you would like the overdraft fee to be waived. You could say, “I noticed I was charged an overdraft fee on [date], and I would like to have it removed.”
The bank might appreciate some background information regarding the circumstances surrounding the overdraft. For instance, you have been having financial difficulties, your payment has been delayed, or a bill has been processed earlier than you anticipated.
Make use of your bank history if you’ve been a good customer in the past and avoided overdraft fees. You could, for instance, say, “I’ve been a loyal customer for several years, and I rarely overdraw.” Is there anything I can do for you?”
Remember that you are asking the bank to treat you with respect. A polite request can go a long way. Even if the representative for customer service refuses to waive the fee, don’t get angry.
Tips to Avoid Overdraft Fees Banks may be less likely to waive your overdraft fee if you’ve made it a habit to spend more than you should. You can save yourself hundreds of dollars in fees and the stress of asking for fees to be waived by avoiding overdraft transactions in certain ways.
Before the deadline, make a deposit or a transfer of funds: You can avoid overdrawing your account by depositing sufficient funds to cover pending transactions.
Find a bank that does not charge fees for overdrafts: They might still process transactions involving overdrafts, but they won’t charge you for doing so.
Get alerts about your bank balance: If your account balance falls below a certain threshold, these alerts will let you know, so you can be sure to deposit before the deposit deadline for that day.
Join the overdraft protection program. To prevent overdrafts, this feature transfers funds from a linked bank account or credit card. Overdraft protection transfers still incur fees from some banks, but these fees are typically less expensive than overdraft fees.
Most Commonly Asked Questions (FAQs): How frequently will a bank reverse an overdraft fee?
Overdraft fees can be waived by banks at their discretion. They cannot guarantee that an overdraft fee will be refunded.
When do fees for overdrafts become due?
When a bank pays for a transaction on your behalf because your account balance is insufficient to cover the cost, you are subject to overdraft fees. A few banks may not charge the expense for the rest of the work day or the following morning, which might allow you to set aside a money installment to your record to cover the overdraft exchanges.
Which bank charges the least for overdrafts?
Partner Bank, Capital One, Find, and USAA doesn’t charge overdraft expenses for check card exchanges. Chime, an online banking platform, does not charge an overdraft fee if your balance is less than $200.
