Bank of America lets you overdraft through three separate mechanisms, each with different costs and limits

Bank of America does not automatically let you overdraft. Instead, you can trigger an overdraft in three ways: by using Overdraft Protection (which pulls money from a linked account), by paying a one-time overdraft fee when a transaction pushes you negative, or by enrolling in Overdraft Line of Credit (a small loan that covers the gap). Which one activates depends on what you have set up and the order transactions post to your account.

The most common path is the overdraft fee. When a debit card purchase, check, or ACH transfer clears and your balance goes below zero, Bank of America charges you $35 per transaction that overdrafts. This is not a loan—it is a fee for the service of letting the transaction go through. You then owe the negative balance back to the bank, plus the fee.

If you have Overdraft Protection turned on, the bank will instead transfer money from a linked savings account or line of credit before charging you a fee. This costs nothing if you have the money in the linked account, but if that account also goes negative, you pay the overdraft fee on both accounts.

Key Takeaways

  • Bank of America charges $35 per transaction that overdraws your account, and you can be charged multiple times per day if several transactions post while you are negative.
  • Overdraft Protection moves money from a linked account automatically and costs nothing if that account has the funds, but both accounts can overdraft separately.
  • The Overdraft Line of Credit is a small loan (usually $100 to $1,000) that covers overdrafts at a lower cost than repeated $35 fees, but you pay interest on what you borrow.
  • Transactions post in an order set by the bank, not the order you made them, which means a small purchase can trigger overdraft fees even if you had enough money when you swiped your card.
  • You can turn off overdraft protection for debit card and ATM transactions, which will straightforward decline the transaction instead of charging you a fee.

How the $35 overdraft fee works and when it triggers

When a transaction clears and your account balance goes negative, Bank of America charges you $35. This happens per transaction, meaning if three transactions post while you are overdrawn, you pay $35 three times. The bank can charge you up to four overdraft fees per day, though the total can reach higher if you have multiple transactions pending.

The timing matters because transactions do not post in the order you made them. Debit card purchases and ATM withdrawals usually post the same day, but checks and ACH transfers can take one to three business days. This means you might have $50 in your account, make a $40 purchase, then have a check from three days ago clear and push you $10 negative—triggering a $35 fee on a transaction you thought was covered.

Bank of America also processes transactions in a specific order: it posts larger transactions before smaller ones, even if you made the smaller purchase first. This is called high-to-low posting, and it can create overdraft fees that would not have happened if transactions posted in the order you made them. For example, if you have $100 and make a $30 purchase followed by a $80 purchase, the bank posts the $80 first, overdrafting you by $10 and charging $35, then posts the $30 (which would have fit). You pay $35 because of the posting order, not because you spent more than you had.

Overdraft Protection: moving money from a linked account automatically

If you link a savings account or money market account to your checking account and turn on Overdraft Protection, Bank of America will transfer money from the linked account before charging you an overdraft fee. The transfer happens automatically when a transaction would overdraft your checking account, and there is no fee for the transfer itself.

This works only if the linked account has the money. If both accounts go negative, you pay the $35 overdraft fee on the checking account, and the savings account may also be charged a fee depending on its terms. Some Bank of America savings accounts charge overdraft fees; others do not.

You can set up Overdraft Protection through the Bank of America app or website by going to Settings, then Overdraft Protection, and selecting which account to link. You can turn it on or off at any time, and you can choose which types of transactions trigger it (debit card, checks, ACH transfers, or all of them).

The Overdraft Line of Credit: a small loan that covers gaps

Bank of America offers an Overdraft Line of Credit, which is a separate credit line (usually between $100 and $1,000) that automatically covers overdrafts instead of charging you a $35 fee. When your checking account goes negative, the bank lends you money from this line to bring the balance back to zero. You then pay interest on what you borrowed, typically at a rate between 17% and 21% annually, depending on your creditworthiness.

This is cheaper than repeated $35 fees if you overdraft more than once or twice a month. For example, if you overdraft four times a month, you pay $140 in fees. With the line of credit, borrowing $100 for a month costs roughly $1.50 in interest. However, if you only overdraft once every few months, the $35 fee is cheaper than opening a credit line.

You must be invited to open an Overdraft Line of Credit; Bank of America does not offer it to all customers. If you are may be able to access, you will see the option in the app under Accounts and Services. Once open, it works automatically—you do not have to do anything when you overdraft.

Turning off overdraft for debit cards and ATM withdrawals

Bank of America allows you to opt out of overdraft protection for debit card purchases and ATM withdrawals. If you turn this off, a transaction will straightforward be declined instead of overdrafting your account. You will not be charged a fee, but the transaction will not go through.

This does not explore to checks or ACH transfers—those can still overdraft your account and trigger fees even if you have opted out of debit card overdrafts. To turn off debit card overdrafts, open the Bank of America app, go to Settings, then Overdraft Protection, and toggle off "Debit Card Transactions" and "ATM Withdrawals".

Opting out is useful if you want to avoid overdraft fees entirely, but it means your card will be declined at the register if you do not have enough money. Some people find this inconvenient; others see it as a useful boundary against overspending.

What happens after you overdraft: repayment and recovery

Once your account is overdrawn, you owe the negative balance plus any fees back to the bank. The bank does not charge interest on the negative balance itself (unlike a credit card), but you must bring the account back to zero or positive. If you do not, the bank may eventually close the account and send the debt to a collection agency.

If you overdraft and then deposit money, the deposit goes toward the negative balance first, then toward any fees. For example, if you are $50 negative and owe a $35 fee, a $100 deposit brings your balance to $15 positive ($100 minus $50 owed minus $35 fee).

Bank of America may reverse one overdraft fee per year if you call and ask, particularly if you have been a customer for a long time or if the overdraft was caused by a bank error. There is no may provide, but it is worth asking if you have a single overdraft you believe was unfair.

How overdraft interacts with pending transactions and holds

Bank of America places holds on certain transactions—typically debit card purchases at gas pumps or hotels, which can hold $1 to $100 more than the actual transaction amount. These holds count toward your available balance even though the transaction has not posted yet. This means you might have $100 in your account, a $75 hold might be placed (reducing your available balance to $25), and then a $50 transaction could overdraft you because your available balance was only $25, even though your actual balance was $100.

Holds usually drop within one to three business days, at which point your available balance goes back up. However, if a transaction posts while a hold is in place and your actual balance goes negative, you will be charged an overdraft fee. The hold itself does not cause the fee—the posted transaction does—but the hold can make it harder to see how much money you actually have available.

Frequently Asked Questions

Can I overdraft my Bank of America account multiple times in one day?

Yes. Bank of America can charge up to four overdraft fees per day, though if you have many transactions pending, the total can be higher. Each transaction that posts while your balance is negative triggers a separate $35 fee, so a day with five overdrawn transactions could result in five fees ($175 total).

What is the difference between available balance and actual balance?

Your actual balance is what you have in the account right now. Your available balance subtracts pending transactions and holds. If your actual balance is $100 but you have a $75 hold, your available balance is $25. A $50 transaction will overdraft your actual balance even though your available balance says you only have $25.

If I overdraft, will it show up on my credit report?

An overdraft itself does not appear on your credit report. However, if you do not pay back the negative balance and the bank sends it to a collection agency, that collection account will appear on your credit report and damage your score.

Can I set a limit on how much I can overdraft?

No. Bank of America does not let you set a maximum overdraft amount. You can only turn overdraft protection on or off, or choose which types of transactions can overdraft. Once overdraft is on, there is no cap on how negative your account can go.

What happens if I never pay back an overdraft?

If you leave your account overdrawn for an extended period (usually 60 to 90 days), Bank of America will close the account and may send the debt to a collection agency. A collection account will appear on your credit report for seven years and make it harder to open bank accounts or get credit in the future.