If you’ve ever been charged an overdraft fee, you know the stress overdrawing from your bank account can bring. All it takes is one uninformed debit card transaction to send your bank account in the negative, which could leave anyone feeling overwhelmed and tense. Read on to learn more about how to get overdraft fees refunded.
Thankfully, there are ways to get your overdraft fee refunded, so you don’t have to worry about losing money. With mobile banking becoming more popular, it’s never been easier to organize your finances and avoid overdraft fees. Learn everything you need to know about getting your overdraft fees waived so you can get your finances back on track!
What Is an Overdraft Fee and How Does It Affect My Bank Account?
An overdraft occurs when charges are made to a bank or financial account without enough money present in the existing account to cover the costs. When this happens, banks usually charge what is known as an overdraft fee. A typical overdraft fee is usually about $35. But, overdraft fees can be less or more depending on where you bank.
Here are a few examples of transactions that could potentially lead to overdraft fees:
- Debit card purchases
- ATM withdrawals
- Checks
- Automatic payments taken directly from your bank balance
- Cash transfers between bank accounts
If you have found yourself in a situation where you have overdrawn money from your checking account, there are a few things you should do. First, transfer funds into your overdrawn account as soon as possible. Often, banks will not charge refund fees when account owners replace overdrawn amounts within 24 hours or less.
If you still see charges deducted from your account, call a customer service representative at your bank and explain why your account was overdrawn. If the reason for the account overdraft was clearly not your fault, banks wouldn’t typically charge you any kind of fee.
It’s also important to note that there is a difference between an overdraft charge, a bank fee, and insufficient funds fees.
An overdraft charge occurs when money is overdrawn from an account. Still, funding from an alternative account (usually a savings account) can cover the overdrawn amount.
Bank fees include potential overdraft fees, monthly maintenance fees, and any other financial services the bank charges for. Insufficient fund fees, also known as NSF fees, are when there is not enough money in any existing accounts to cover the negative balance from a checking or bank account.
For example, say you had Credit card interest charges automatically deducted from your bank account when you didn’t have enough money to cover the expenses. With some banks, if you have enough cash in your savings to cover the overdrawn amount, the bank will deduct the money from your savings and may charge an overdraft fee. But if you didn’t have enough funds in your savings, or if you have opted out of Overdraft protection, that would lead to an NSF fee since there was not enough funding authorized to cover the charges.
How To Get an Overdraft Fee Refund From the Major Banks
Account owners can take advantage of unique overdraft protection services at some of the most popular banks in the U.S. However, each bank is a bit different, so rules and procedures may be different if you have accounts at various banks.
Here is how fee refunds work at a few of the most used banks in the United States:
Bank of America
With Bank of America, there is no set overdraft coverage program. If you overspend on your account, you should call customer service and see what they can do for you.
Chase
Chase has a program called “Chase Overdraft Assist,” where there are no fees for overdrawing in the amount of $50 or less. You can also get an overdraft fee refund if you replace the overdrawn funds within one business day. This perk is available for all Chase accounts except for “Chase Secure Checking,” “Chase High School Checking,” and “Chase First Checking.”
Wells Fargo
Wells Fargo has an overdraft protection service called “Overdraft Rewind.” This program waives Overdraft fees if sufficient money enters the account by 9:00 am the next day.
CitiBank
At CitiBank, there are no protection programs in place for fee refunds. If you have multiple overdraft charges, you should call customer service and notify them of the issue.
U.S. Bank
U.S. Bank will refund overdraft fees if the overdrawn amount is under $5.
Truist Bank
There is no overdraft fee at Truist Bank if the amount overdrawn is under $5. Also, Truist Bank waives overdraft fees for specific customers if their negative balance is $100 or less in the summertime.
PNC Bank
With the “PNC Virtual Wallet Student Account,” account owners will receive refunds for up to one overdraft. There is no fee charged for all other account owners if the overdrawn amount is $5 or less.
T.D. Bank
If you bank at T.D. Bank, you will receive reimbursement for only two overdraft fees each year, and only if the amount isn’t higher than $70.
Fifth Third Bank
At Fifth Third Bank, you won’t receive a charge for an overdraft fee if you deposit sufficient funding into your account by midnight of the next business day.
Citizens Bank
Citizens Bank has overdraft protection called “Citizens Peace of Mind.” With this program, account owners receive an alert if their account is overdrawn and will receive a refund if they deposit money back into their account by 10:00 pm the next business day.
Regions Bank
Regions Bank will refund one overdraft fee if notified within one business day.
Can Bank Overdraft Fees Affect My Credit Score?
If you’re concerned about overdraft fees affecting your credit score, there’s no need to worry. Overdraft charges and even overdraft fee refunds have no direct impact on credit reports. But, while overdraft fees do not directly impact your score, they can definitely indirectly negatively affect your credit. That’s why it’s best to avoid overdrafts whenever you can for your own financial health.
How can overdraft fees indirectly affect your credit? When you get an overdraft fee, that means there is $0 or less in your checking account balance. If you have automatic bill payments scheduled, there may not be enough funds in your account to cover your financial obligations. If an automatic bill payment fails to go through, this may lead to a missed or late payment. That missed, or late payment may also be followed by late payment fees, which just increases the amount of debt a person has.
Furthermore, when compiling information for your credit report credit bureaus look at financial history, such as how on time you are with payments and how much total debt you currently have. Suppose your account is filled with overdraft charges, late fees, missed payments, and accumulated debt. In that case, your credit will most likely take a hit. When you have bad credit, it’s more challenging to find approval from financial institutions on loans and lines of credit.
On the other hand, when you avoid overdraft expenses and stay on top of your finances, you may actually see an improvement in your score over time. If you are trying to improve a bad credit score, it’s essential to make on-time bill payments so you can reduce your overall debt.
How To Avoid Future Overdraft Fees and Other Bank Fees
Financial protection is important. That is why you want to do everything you can to prevent overdraft fees. Here are a few things you can do now to make sure you never overdraw from your checking account.
Have a Savings Account
To make sure you are never charged an overdraft fee, banks often offer some kind of overdraft protection. This protection ensures that funds will automatically be withdrawn from your savings account if you ever overdraw money from your checking account. When you have sufficient backup savings stored, you can rest assured knowing you are covered if you ever accidentally overdraw from your account.
Balance Your Finances
With mobile banking, it’s easy to stay on top of your finances and be familiar with the balance of your various financial accounts. Start to make it a habit to check your online banking account every few days. Sometimes people overspend on their accounts simply because they aren’t really aware of how much readily available funds they have.
When you regularly check in on your finances, you’ll know to stop spending when your bank account balance dips. That way, you can stop spending money and avoid overdraft fees until you’ve put more money into your account.
Stick To a Budget
When avoiding overdraft fees, it’s another good practice to build a yearly budget or monthly budget and stick to it. Creating a budget will not only help you avoid overdraft fees, but it will also help you organize your finances and ensure you never miss a bill payment.
Put On Alerts
Most banks offer an alert program where an account owner will receive an email or text if their checking account ever gets below a specific amount. With alerts like this, you’ll be notified as soon as your available balance starts to get low, so you know to stop spending. These alerts also let you know when it’s time to add more money to your checking account.
Get a Loan
If you know you will have to spend money but don’t have enough cash in your bank account, getting a loan is usually always an option. A financial institution like a credit union usually has good deals available if you are a loyal customer and meet their strict qualification requirements. Or, for a more flexible loan option, funding like a personal online bad credit loan could be the perfect solution to cover your expenses. With a loan you don’t have to worry about taking money out of your checking account.
When it comes to providing financial advice, any expert will tell you it’s best for your financial well-being to avoid overdraft fees at all costs. By staying familiar with your account balances and communicating with your bank if you see anything out of the ordinary, you can make sure you never overdraw from your account and will never have to worry about overdraft fees!
References:
How to Get Overdraft Fees Refunded at Different Banks
Does an Overdraft Affect Your Credit Score?
Overdraft Fees vs. Nsf fees: What’s the Difference?