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How to Avoid Overdraft Fees

On a hectic weekend of running errands, it’s easy to lose track of checking account transactions along the way. If you overdraw your account, banks might charge you an overdraft fee of $35 or more. Fortunately, with some know-how, you might be able to get that fee waived.

Whether an NSF fee was the result of an innocent oversight or poor timing on an automatic payment, you can save yourself considerable cash if you learn how to get overdraft fees waived — or avoid them altogether. Overdraft protection is another option. Although overdraft coverage helps you avoid the embarrassment of having your debit card declined at checkout, it can push you deeper into debt, especially if you live paycheck to paycheck.

What Is an Overdraft Fee?

An overdraft fee is also known as nonsufficient funds fee or insufficient funds fee — is a charge you pay the bank for spending more money in your checking account than is available in your bank balance, resulting in a negative balance. Overdraft fees typically cost around $30 but vary by bank or credit union. Expect to pay big for Bank of America, Wells Fargo and Chase overdraft fees, as well as at most other banks.

What some consumers don’t know is that you have a good chance of getting the overdraft fee waived with a quick phone call to your bank’s customer service line. Find out what you should say to successfully get overdraft fees waived.

How to Avoid Bank Overdraft Fees

Overdraft fees range from about $10 to $35, so just one overdraft per month could cost you $120 to $420 per year. The more aware you are of that cost and your options for how to avoid overdraft fees, the better you can manage your money. Consider your spending habits to determine which method of avoiding overdraft fees is best for you, or try a combination of methods to avoid fees.

Here are five steps you can take to avoid overdraft fees:

1. Opt Out of Overdraft Coverage

If you’ve been hit with overdraft fees one too many times or you want to avoid the hassle of asking to get these fees waived, opting out of overdraft coverage can spare you a lot of grief. Without overdraft coverage, any time you attempt to spend more money than there is in your account, the transaction will be denied.

2. Turn Off Automatic Payments

Automatic payments make it easy for you to forget about your monthly bills. If these payments are making it hard for you to gauge how much money you have to spend, turn off automatic withdrawals. Being able to control when you make payments helps you be more mindful of the money going in and out of your account.

3. Set Up Direct Deposit

If your paychecks are automatically deposited into your bank account, you’re less likely to overdraft. If you’re still depositing checks the old-fashioned way, it could take longer to clear, and you might not have enough money in your account in time to cover any pending charges — especially if you procrastinate heading to the bank. Depending on your bank, recurring direct deposits could even clear a day or two earlier than expected, helping you avoid overdraft charges and access your paycheck sooner.

4. Get Overdraft Protection

Overdraft protection links your bank account to another account, such as checking or savings, or a line of credit. Whenever you overdraft, your bank will pull out funds from your backup account, typically a savings account, and charge you an overdraft transfer fee, usually around $10 to $13 per day or per transfer. This could cost you less than overdraft fees. For example, the Bank of America overdraft fee is $35, whereas its overdraft protection fee is only $10 per transfer.

Find the best way to control spending, and reduce how much you spend on these outrageous bank fees. Banks and credit unions have become more sensitive to how customers respond to overdraft fees in recent years, so there’s no reason to let these charges hack away at your funds. In some cases, you can get your bank or credit union to waive the fees for you.

5. Check Account Balance

Of course, the best way to avoid an overdraft fee is to know how much money you have in your account. To do that, you should check your account balance regularly, so you know how to manage your budget.

See: 12 Banking Fees You Should Never Pay

Overdraft Fees at 10 Major Banks

If you opted into your bank’s overdraft protection program, expect to pay some hefty fees for the service. You might pay less in checking account fees, however, and some banks’ overdraft programs have begun waiving bank overdraft fees — not to be confused with monthly maintenance fees — for transactions that overdraw your account balance by $5 or less.

Here’s the cost of overdraft fees and overdraft protection at major banks including Bank of America, Chase and Wells Fargo:

Overdraft Fees at 10 Big Banks

Bank Overdraft Fee

Overdraft Protection Fee

Bank of America $35 $10/transfer
BB&T $36 $12.50/day
Chase $34 None
Citibank $34 $10/day
PNC Bank $36 $10/charge
SunTrust $36 $12.50/day
TD Bank $35 $10/transfer
U.S. Bank $36 $12.50/day
Wells Fargo $35 Varies

How to Get Overdraft Fees Waived

Not many depositors stop to contest overdraft fees because they’re usually the ones at fault. However, even if the blame can be solely placed on your shoulders, you don’t have to suffer these costly fees.

Follow these steps to convince your bank to waive overdraft fees:

1. Remain Polite and Patient

Even if your request to have an overdraft fee waived is initially shot down, don’t lose your head. Regardless of the barricades your bank representative might put up to deny your request for a waiver, press on with kindness. No one wants to deal with an irate customer who’s yelling — talk it out with the associate and remain pleasant throughout the entire exchange.

Los Angeles resident Jaime Catmull was shocked when she found she’d been charged several Wells Fargo overdraft fees of $35 each after a quick meal at McDonald’s. But she quickly found that a polite tone and simple request was all it took to save her over $100 in fees.

“All I did was call them up and ask to have the entire string of overdraft fees wiped off my bank account,” Catmull said. “I made sure to ask nicely. They didn’t question me for an explanation at all, and waived every charge on the spot.”

Related: 31 Worst Fees in America

2. Make a Straightforward Request

Typically, a simple phone call will suffice to get the fee waived. You don’t need to give a long and grueling explanation from the onset. Your initial request can be as simple as:

“Hi, I just noticed an overdraft fee on my account. I’m calling to have it waived.”

The representative will likely put you on hold to either review your account or seek approval from a supervisor to proceed. With a positive approach, you’ll likely see equally positive results.

See: Customers Paid Over $6.4 Billion in ATM and Overdraft Fees in 2016

3. Focus on What a Great Customer You Are

If this is your first offense, or if it’s been quite some time since your last overdraft incident, play up your good customer report card. Explain that it was a one-off mishap and refer to your sterling record.

If your account has never slipped into the negative before or your paycheck is direct deposited into your account, you can strengthen your case by asking for a good-faith waiver. Many checking account holders, including Andrew Schrage of MoneyCrashers.com, have had success using their good rapport with a financial institution to get their overdraft fees forgiven.

“The last time I switched banks, I, unfortunately, didn’t do a very good job of staying organized throughout the process,” Schrage said. “I switched my direct deposit into the new account but forgot to transfer a few automatic payments from my old account. As a result, two utility bills were drawn from the old account when there weren’t enough funds to cover them.”

Despite planning to switch banks anyway, he decided to pursue a waiver request: “I just told them there was a problem with my direct deposit,” he said. “I previously had a very good history with the bank and had never faced an overdraft before, which helped me to get a one-time adjustment.”

4. Leverage Your Loyalty

Loyalty can play a major role in your ability to get overdraft fees waived. Since the Bank Transfer Day movement in 2011 — when tens of thousands of people pledged to switch from banks to credit unions to protest high bank fees — financial institutions have been wary of losing their most loyal customers because of their fees.

When talking to your bank, note how many years you’ve been a customer with the institution and add in the number of active accounts you have with the bank to prove your point. A response similar to this might help turn the tables in your favor:

“I’ve been a loyal customer for 12 years and opened a number of accounts with this bank because I was always treated right. I really would like this overdraft fee waived. What can you do to help me with this?”

If the customer service representative sounds determined to not waive your charges, you don’t necessarily have to take no for an answer.

5. Make an Appearance

Visit your branch in person and speak with an associate about how to get overdraft fees waived. It’s a lot harder to say no to a customer in person. By being patient, sincere and pointing to your loyalty as a customer, an associate will be hard-pressed to say no to a waiver.

Check Out: 5 Best Banks for People Who Hate Fees 

You have the power to prevent your financial institution from getting more of your money in fees — if you learn as much as you can about your bank’s overdraft rules and how your accounts work. In the process of managing your accounts carefully, you also can build a stronger rapport with your financial institution, which could benefit you in the long run.

Laira MartinBrian Nelson and Jennifer Calonia contributed to the reporting for this article.