What happens when you overdraft at Bank of America
An overdraft happens when you spend more money than you have in your checking account. Bank of America will process the transaction anyway, but your account balance goes negative. You then owe the bank that money plus an overdraft fee.
Bank of America charges an overdraft fee each time a transaction overdraws your account. The fee amount depends on your account type, but it is typically around $35 per overdraft. If multiple transactions overdraw your account on the same day, you may be charged multiple fees — one for each transaction that goes through.
The bank can also refuse to process a transaction if it would overdraft your account. When this happens, the transaction is declined and you are not charged an overdraft fee. Whether the bank approves or declines an overdraft depends on your account settings and history with the bank.
Key Takeaways
- Bank of America charges a fee each time a transaction overdraws your account, typically around $35 per overdraft.
- You can turn overdraft protection on or off through your online banking settings or by calling the bank.
- Overdraft protection covers debit card purchases and ATM withdrawals, but not all transaction types.
- If you overdraft repeatedly, the bank may close your account or report you to ChexSystems, which can affect your ability to open accounts elsewhere.
- Linking a savings account or credit card to overdraft protection can prevent fees by covering shortfalls automatically.
How to turn overdraft protection on or off
You control whether Bank of America will process overdrafts on your account. Log into your Bank of America online banking account and go to the settings or preferences section. Look for "overdraft protection" or "overdraft settings." You will see options to turn overdraft coverage on or off for different types of transactions.
If you do not want the bank to process overdrafts at all, you can turn off overdraft protection. This means transactions will be declined if you do not have enough money in your account. You will not be charged an overdraft fee, but your debit card or check may be rejected at the point of sale.
You can also call Bank of America customer service at the number on the back of your debit card to change your overdraft settings by phone. A representative can walk you through the options and make changes on the spot.
Overdraft protection through linked accounts
Instead of paying overdraft fees, you can link a savings account or credit card to your checking account. If your checking account balance drops below zero, the bank will automatically transfer money from the linked account to cover the shortfall. This is called overdraft protection, and it prevents overdraft fees.
If you link a savings account, the bank transfers money from savings to checking when needed. If you link a credit card, the bank treats it like a cash advance on the card. Either way, you avoid the overdraft fee, but you may pay interest on the transferred amount if you do not pay it back quickly.
To set up linked overdraft protection, go to your account settings in online banking or call the bank. You will need to provide the account number of the savings account or credit card you want to link. The bank will verify that you own both accounts before activating the link.
Transaction types that can and cannot overdraft
Not every type of transaction can overdraft your account at Bank of America. Debit card purchases and ATM withdrawals can overdraft. Checks and ACH transfers (electronic payments to other accounts) can also overdraft.
However, some transactions cannot overdraft. Wire transfers will be rejected if you do not have enough money. Bill payments through Bank of America's bill pay service may also be rejected rather than allowed to overdraft, depending on your account type.
The bank's rules about which transactions can overdraft may change, so check your account settings or call the bank if you are unsure about a specific type of transaction.
Overdraft fees and daily limits
Bank of America typically charges one overdraft fee per transaction that overdraws your account. If you make five debit card purchases that all overdraft your account on the same day, you could be charged five separate fees. However, the bank has a daily limit on the total number of overdraft fees you can be charged in one day — usually around four fees per day, though this varies by account type.
The overdraft fee itself is typically around $35, but the exact amount depends on your account type and your banking history with the bank. Some accounts have lower fees or no overdraft fees at all. Check your account agreement or call the bank to find out the exact fee for your account.
If you overdraft your account, the bank expects you to bring your balance back to zero within a reasonable time. If you stay overdrawn for an extended period, the bank may charge additional fees or close your account.
What happens if you overdraft repeatedly
If you overdraft your account multiple times, Bank of America may take action. The bank may close your checking account if it sees a pattern of overdrafts. Once your account is closed, you will need to wait before you can open a new account with the bank.
The bank may also report your account to ChexSystems, a database that tracks banking problems. If you are reported to ChexSystems, other banks will see this record when you try to open a new account with them. This can make it harder to open a checking account elsewhere, even at a different bank.
To avoid repeated overdrafts, set up overdraft protection with a linked account, turn off overdraft protection so transactions are declined instead, or monitor your balance regularly through online banking or the Bank of America mobile app.
How to recover from an overdraft
If your account is overdrawn, deposit money as soon as you can to bring your balance back to zero or above. You can deposit money through an ATM, at a Bank of America branch, through a mobile check deposit, or by having money transferred from another account.
Once your balance is positive again, you are no longer overdrawn. However, you will still owe any overdraft fees that were charged. Those fees are deducted from your account when they are assessed, so your balance may go negative again if you do not deposit enough to cover both the original overdraft amount and the fees.
If you have been charged overdraft fees and believe they were unfair or made in error, you can contact Bank of America and ask them to review the charges. The bank may reverse one or two fees if you have a good history with the account, but this is not may provide.
Frequently Asked Questions
Can I overdraft my Bank of America account without overdraft protection?
If you turn off overdraft protection, the bank will decline transactions that would overdraft your account instead of processing them. You will not be charged an overdraft fee, but your debit card or check will be rejected. Some transactions, like wire transfers, are always declined if you do not have enough money.
How long does it take to recover from an overdraft?
Once you deposit money to bring your balance back to zero or above, you are no longer overdrawn. There is no waiting period. However, if the bank has reported you to ChexSystems, that record may stay on file for several years, which can affect your ability to open accounts at other banks.
Will overdrafting hurt my credit score?
Overdrafting your checking account does not directly affect your credit score, because checking accounts are not reported to credit bureaus. However, if the bank closes your account and reports you to ChexSystems, this can make it harder to open accounts elsewhere.
What is the difference between overdraft protection and overdraft fees?
Overdraft protection is a service that prevents overdraft fees by automatically transferring money from a linked account. Overdraft fees are charges the bank assesses when you overdraft without protection. You can have one without the other — protection on, fees off, or vice versa.
Can Bank of America reverse overdraft fees?
Bank of America may reverse one or two overdraft fees if you contact them and explain the situation, especially if you have a good account history. However, the bank is not required to reverse fees, and repeated requests may not be successful. It is worth asking, but do not count on it.