What happens if you overdraft your bank account and dont pay it back

what happens if you overdraft your bank account and don't pay it back

What happens if you overdraft your bank account and don’t pay it back? Some inconveniences you may run into are: 

  • Increased debt
  • Declining credit score 
  • Accumulating fees

Here, you’ll learn about overdrafted accounts and how you can avoid future overdrafts.

Reasons You May Have a Checking Account Overdraft

There are a few reasons you may find yourself with an overdrawn account. 

Pending Transactions 

When you make a purchase using a debit card, there is often some time between the actual purchase and when a record of that purchase shows up on your bank account balance. During this time, the transaction is considered pending. If you look at your account balance while you have a pending transaction, the balance you see may not be totally accurate, making you think you have more money than you actually do. This misconception may cause you to accidentally overspend and overdraw from your account. 

Pending Direct Deposit 

Just like most transactions and purchases, direct deposits also have a period of time when they are considered pending otherwise known as a Pending direct deposit. Depending on the source, the length of time a direct deposit takes can range from a few hours to a few days. If you think you have enough money in your bank account because you have a scheduled payment, check your current balance before making any major purchases. 

Impulse Spending

Impulse shopping is something everyone indulges in every now and then. Maybe it’s a special morning coffee or a clothing item that just happens to catch your eye at the store. While it can feel good and be fun to make spontaneous purchases, making a habit out of it can severely harm your finances. Frequent unchecked impulse shopping can easily lead to an overdrawn checking account. For your overall financial health, it is best to learn how to stop impulse buying and save more


Identity thieves will often try to use their victims’ bank accounts to make extravagant purchases. These purchases may cause your bank account to go negative. If this happens to you, contact your bank immediately and have them freeze your account. They will then provide you with new account information and replenish any money you had stolen. 

Bank Error

You may have an overdrawn account due to a simple banking system error. If you have an account overdraft due to a bank error, a representative should be able to help you rectify the issue that same day. 

What Could Happen if You Don’t Pay Back a Bank Account Overdraft?

You may run into a few financial inconveniences if you have an overdrawn account and haven’t paid it back. Some issues you may encounter if you don’t pay back a checking account overdraft are: 

Accumulated Overdraft Fees

You will most likely encounter overdraft fees when you overdraw from your checking account. An overdraft fee is a financial penalty banks charge to customers who overspend on their accounts. As recently as 2019, banks and credit unions received about $15.5 billion in paid overdraft or insufficient funds fees. 

Some banks charge overdraft fees per overdrawn transaction, or per every day the account remains in a negative or zero balance. That means if you fail to pay back an overdrawn account, you may continue to accumulate overdraft fees. The longer you wait to pay back your overdraft, the more money you will end up owing in the long run. To avoid falling deeper into debt, it is best to pay overdraft fees and rectify a bank account overdraft as soon as possible.  

Inability To Use Make Debit Card Transactions

If you have a negative balance on your bank account, you will not be able to make purchases using your debit card. A debit card purchase draws money directly from the account holder’s checking account. If there is no money in that checking account, transactions made via that account’s debit card will not go through. 

Declined Payments

When you don’t have enough money in your bank account, you may also end up with declined payments or transactions. For example, if you had automatic payments set up for one of your bills, the payment may be declined if there are insufficient funds in your account at the time of the autopay attempt. 

Failure to pay back an overdrawn checking account may cause multiple declined payments, especially if you make no other arrangements to pay the bills or expenses set up to withdraw from your account. If you continue down that path, you may encounter other issues. 

Late or Missed Payments

If you had a declined payment because of a negative balance, the result might be a late or missed payment. This kind of account delinquency can have a detrimental effect on your credit score. 

Loan Default

Borrowers who have several missed payments and show no attempt to pay back their loan may fall into default. When you default on a loan, the lender may send your debt to a collections agency or try to obtain the legal right to garnish your wages. 

Wage Garnishment

Some lenders may have the right to wage garnishment for unpaid debts. Wage garnishment is when lenders or financial institutions take money directly from your paycheck, usually before the money ever reaches your bank account. Having your wages garnished can be a huge setback, especially if you are trying to rectify an overdrawn checking account issue. 

How a Checking Account Overdraft Can Affect Your Credit Report 

Overdrafting in itself may not directly affect your credit, but it almost certainly will lead to situations that will. For example, overdrafts can lead to missed or late payments that can negatively affect your credit report for up to seven years. Overdrafts can also increase your debt, which may also cause your credit score to go down. 

How To Fix Overdrawn Checking Accounts

As soon as you are aware of your overdrawn account, take a look at your most recent transactions. Make sure there are no fraudulent charges. If there are, contact your bank right away so they can help you out. If there are no fraudulent charges, you want to come up with a payment plan for a positive balance right away. If there is not enough money in a backup account, you may want to look into a quick loan or other financial solutions.  

How To Get Money for an Overdraft Fee or Overdrawn Checking Account

If you have an overdrawn checking account, it is essential to rectify the issue right away. Below are a few ways you can get some quick cash! 

Personal Installment Loans 

One of the most convenient and versatile ways to get quick money is via personal installment loans. There are even installment loans that can help build credit. You can also choose long-term or short-term financing options depending on how much money you have to pay back. 

Payday Loans

If you have a very minimal amount of money to pay back, you may consider a pay day loan. Payday loans offer low loan amounts and short repayment terms. They also often come with high rates and additional fees for borrowers who don’t pay off their balance quickly. 

Car Title Loans

If you own a vehicle and are willing to use the title as collateral, you may be eligible for a car title loan. Like payday loans, car title loans also offer low loan amounts and brief payback terms. Furthermore, you may risk losing your vehicle if you miss payments or default on your title loan. 

Get Money Without a Loan

Those who want to get a bit of extra money without applying for a loan also have a few options. A few ways you can get quick cash without a loan are: 

  • Getting a temporary part-time job or side hustle.
  • Selling unwanted items, clothing, decor, or appliances. 
  • Dipping into your savings account. 
  • Asking a trusted friend or family member for money. 

How To Avoid an Overdrawn Bank Account 

To avoid overdraft fees and the other inconveniences that can come with an unpaid bank overdraft, try the helpful tips below. 

Get Overdraft Protection 

If you do not have it already, you want to opt-in to overdraft protection immediately. Overdraft protection helps ensure that you don’t accidentally overdraw from your checking account. With overdraft coverage, your bank or financial institution may provide you with an overdraft credit limit. You will then have financial protection up to that credit amount in case you ever overspend on your account. 

Set up Low Balance Alerts

Along with overdraft protection, it may also be a good idea to set up low balance alerts for your checking account. You can set up alerts to send you a text, phone call, or email if your account dips at or below a certain amount. From there, you can either transfer money from another account or be mindful not to spend until you have replenished funds in the account. 

Get a Backup Savings Account 

Having a linked savings account can also be extremely helpful in avoiding overdrafts. You may set up permissions for your primary account to draw from your backup account to help ensure you always have enough money. 

Check Your Bank Balances Regularly

When you stay familiar with your current account balances, you will have a more accurate idea of how much money you have available to spend. With online or mobile banking, you can easily check your current checking account balance straight from your computer or smartphone. 

Overdraft Fees Can Price People Out of Banking | Consumer Financial Protection Bureau

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