Chase allows overdrafts, but only if you opt in—and the cost is steep

Chase will let you overdraw your checking account, but only if you have overdraft protection turned on. Without it, transactions that would take your balance below zero are straightforward declined at the point of sale or ATM. If you do have overdraft protection enabled, Chase covers the shortfall, but charges you $35 per overdraft transaction—and you can be charged multiple times in a single day if several transactions post while your account is negative.

The overdraft itself is not a loan you repay over time. It is a fee Chase charges you for the service of covering a transaction when your balance is insufficient. You still owe the full amount of the transaction; the fee is straightforward added on top. If you do not deposit money to bring your account back to positive within a reasonable time, Chase may close your account and report you to ChexSystems, a banking history database that makes it harder to open accounts elsewhere.

Key Takeaways

  • Overdraft protection is optional—Chase will decline transactions instead if you do not turn it on, which costs nothing but may be inconvenient.
  • Each overdraft transaction costs $35, and Chase can charge you multiple times per day if several transactions post while you are overdrawn.
  • You can turn overdraft protection on or off through Chase's mobile app, online banking, or by calling customer service at the number on your card.
  • If your account stays overdrawn for more than a few days, contact Chase when ready to work out a repayment plan or risk account closure and a report to ChexSystems.

How overdraft protection works at Chase

When overdraft protection is on, Chase will cover a transaction even if your available balance is not sufficient. The transaction goes through, your balance goes negative, and you are charged $35. This happens automatically—you do not need to request it or sign anything each time.

Chase charges one fee per transaction, not one fee per day. If you make five purchases while overdrawn, you will be charged five $35 fees. However, Chase does cap the total number of overdraft fees you can be charged in a single day: most checking accounts are limited to four overdraft fees per day, though this varies slightly by account type. The fees are deducted from your account, making the negative balance even deeper.

The overdraft itself does not accrue interest the way a credit card or loan does. You owe the full amount of the transaction plus the $35 fee, and that debt does not grow larger over time. However, if your account remains overdrawn for several days, Chase may charge an additional fee called a sustained overdraft fee (usually $35) if your balance stays negative for more than a set number of days—typically five to seven, depending on your account.

Turning overdraft protection on or off

You control whether overdraft protection is active on your account. To change this setting, log into your Chase account online or through the mobile app, navigate to your checking account settings, and look for "Overdraft Protection" or "Overdraft Options." You can toggle it on or off from there. The change usually takes effect when ready, though it may take a few hours to process.

If you prefer not to use the app or website, you can call the customer service number on the back of your Chase debit card and ask a representative to turn overdraft protection on or off. They can make the change over the phone in a few minutes. There is no fee to enable or disable the feature.

Keep in mind that turning overdraft protection off does not prevent you from overdrawing your account entirely—it only prevents Chase from covering the transaction. If you attempt a transaction that would overdraw your account with protection off, the transaction will be declined, and you will not be charged a fee. However, some merchants may charge you a fee for the declined transaction, so this is not risk-free.

What to do if you overdraw your account

If you realize your account is overdrawn, deposit money as soon as possible to bring the balance back to positive. The sooner you do this, the less likely you are to incur additional fees. If you deposit enough to cover the overdraft and the fees, your account will be restored to good standing when ready.

If you cannot deposit money right away, contact Chase customer service before your account has been overdrawn for more than a few days. Explain your situation and ask whether they can waive the overdraft fees or work out a repayment plan. Chase has some discretion here, especially if you have been a customer for a long time and this is your first overdraft. They cannot reverse fees automatically, but they may do so if you ask and have a reasonable explanation.

If your account remains overdrawn for an extended period—usually more than 30 days—Chase will likely close the account and may report the negative balance to a collection agency. They will also report your account closure to ChexSystems, which is a database that banks use to screen applicants. A ChexSystems report can make it difficult or impossible to open a checking account at another bank for several years.

Overdraft protection versus linked savings accounts

Chase offers an alternative to overdraft protection called overdraft transfer, which links your checking account to a savings account. If a transaction would overdraw your checking account, Chase automatically transfers money from your linked savings account instead. This costs nothing—there is no $35 fee—but it only works if you have sufficient funds in the savings account.

To set up overdraft transfer, log into your Chase account online or through the app, go to your checking account settings, and select "Overdraft Options." Choose "Transfer from savings" instead of "Overdraft Protection." You can link any Chase savings account you own, and the transfer happens automatically.

If you do not have a savings account with Chase, or if your savings account does not have enough money to cover the overdraft, the transaction will be declined—overdraft transfer does not fall back to the $35 overdraft fee. This makes it a safer option if you want to avoid fees, but it requires you to maintain a savings buffer.

Overdraft fees and your credit score

Overdraft fees themselves do not appear on your credit report and do not affect your credit score directly. However, if your account stays overdrawn long enough that Chase sends it to a collection agency, that collection account will appear on your credit report and will damage your score significantly.

Additionally, if Chase closes your account due to a prolonged overdraft and reports you to ChexSystems, that report does not affect your credit score but does make it harder to open a new bank account. Many banks check ChexSystems before opening an account, and a negative report can result in denial.

Frequently Asked Questions

Can Chase charge me multiple overdraft fees in one day?

Yes. Chase charges $35 per overdraft transaction, and you can be charged up to four times per day. If you make five purchases while overdrawn, you will be charged four fees on the first day and one fee on the next day (or whenever the fifth transaction posts). This is why overdrafts can become expensive very quickly.

Will Chase waive an overdraft fee if I ask?

Chase has discretion to waive fees, especially if you have been a customer for a long time or if this is your first overdraft. Call customer service and explain your situation. They cannot reverse fees automatically, but they may do so if you ask politely and have a reasonable explanation. There is no harm in asking.

What happens if I ignore an overdrawn account?

If your account stays overdrawn for more than 30 days, Chase will close it and may send the negative balance to a collection agency. The account closure will be reported to ChexSystems, making it difficult to open a checking account elsewhere for several years. Avoid this by depositing money or contacting Chase as soon as you realize you are overdrawn.

Is overdraft protection the same as a line of credit?

No. Overdraft protection is a fee-based service that covers a single transaction. A line of credit is a separate product that lets you borrow money and repay it over time with interest. Chase does offer lines of credit, but overdraft protection is not one of them.

Can I use overdraft protection at an ATM?

Yes, if overdraft protection is enabled, you can withdraw cash from an ATM even if your balance is insufficient. The withdrawal will go through, your balance will go negative, and you will be charged $35. However, most ATMs have daily withdrawal limits, so you may not be able to withdraw as much as you want.