Consumer experiences with overdraft programs

We’re releasing a report on consumer experiences with overdraft programs. An overdraft happens when you don’t have enough money in your checking account to cover a purchase or payment and your bank or credit union pays it anyway. When this happens, your financial institution may charge you an overdraft fee. 

We interviewed 88 people who had recently been charged an overdraft fee or had a transaction stopped because they didn’t have enough money to complete it.  Many of these people were concerned about high overdraft fees. 

If you’ve been charged with overdraft fees, take a look at our guide to managing your checking account. There, you’ll find tips you can use to reduce the likelihood of an overdraft. 

For example, you can link your checking account to a savings account or another account. Your bank or credit union will pull money from the other account if you run out of money. They will generally charge a fee for the transfer that is lower than the overdraft fee. Several people we talked to told us that having a linked account helped them to pay lower fees. 

Some of the people we talked to preferred to keep their checking and savings accounts separate. If you prefer to take other steps to avoid overdrawing your account, check out our worksheet with advice on managing spending. Keep in mind that deposits, withdrawals, and other transactions may not always show up on your account balance immediately, or in the order you expect them to. Even if you keep close track, you could still overdraft your account if you don’t give transactions time to clear.

Many people in the study shared that they’re often surprised by overdraft fees because they forget about previously scheduled payments. We have tips for keeping track of your balance and managing outstanding payments in our guide to managing your checking account . 

You can also take control of your checking account by deciding whether or not you want overdraft on your debit card purchases and ATM withdrawals. Some of the people we talked to didn’t realize they could avoid paying overdraft fees on these transactions by not opting in to overdraft coverage. Learn more about your options on our blog.  

Look through our report on consumers’ experiences with overdraft programs to find out more about what we heard. We also want to hear from you. You can tell us your story, good or bad, about your experience with checking accounts and overdraft programs.