To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.
We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Types of Checking Accounts.
Checking Account Basics. Opening a Checking Account. Paying With Checks. Using a Debit Card. Best Checking Accounts. Business Checking Accounts. Banking Checking Accounts. What Are the Consequences of Overdrawing a Checking Account Even if you regularly peek at your bank balances online, it is possible to accidentally let your account fall negative, otherwise known as overdrawing your account.
Key Takeaways If you have overdraft protection, your bank will let your account become negative but will charge you fees for every transaction. Monitoring your account closely—and linking your checking account to a backup savings account—can help you avoid overdraft fees. Article Sources. Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles. Contact us for more details. An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. We can cover your overdrafts in two different ways:.
We do not authorize and pay overdrafts for the following types of transactions unless you ask us to see below. We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction. If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions, complete this form and present it at any branch or mail it to: 2 S. Folger, Carrollton, MO You can revoke your authorization for Carroll County Trust Company to pay these overdrafts at any time in writing or by calling us at Your revocation must include both your name and your account number so that we can properly identify your account.
Prior to , many banks and financial institutions automatically enrolled their customers in overdraft protection programs. Often you had to affirmatively say "no" in order to end the coverage.
That changed in mid Now, if you want overdraft protection for standard debt and ATM transactions, you must affirmatively opt into the program. These rules don't apply to writing checks or automatic bill payments. If you don't want overdraft protection for writing checks with insufficient funds or automatic bill payments, talk to your bank. There are several reasons why most consumer advocates recommend against opting into overdraft protection. And a study done by the CFPB found that people who have overdraft protection pay significantly more bank fees than do those without coverage.
You can read the study on the CFPB's website. Let's say you have overdraft protection. The banks love overdraft protection. The CFPB study found that banks used a confusing set of rules to determine how they impose fees, order consumer transactions, and set coverage limits. This makes it difficult for consumers to predict when and how overdraft fees will be assessed.
If a consumer runs up multiple overdraft fees and ends up with a negative bank account balance, the bank will eventually close that account. Once your account is closed, it is much harder to get another account at a different bank. According to the CFPB study, those with overdraft coverage are 2. Many consumers have unwittingly opted into overdraft coverage.
If you aren't sure if you have overdraft protection, call your bank and ask. If you have opted in, you can immediately opt out.
0コメント