What to do when you overdraft

A young women checks for overdraft on her phone.

Here’s what happens when you spend more than you have in your checking account — plus tips to help avoid doing it.

It can happen to anyone: You may eventually find yourself with a negative balance in your bank account from overspending.

When a transaction exceeds your available balance1, the bank may choose to cover that transaction for you. This leaves you with a negative balance and is known as an overdraft.

What happens to your account when you overdraft?

Overdrafts occur when you spend more money than you have available in your checking account and the bank pays your transaction. The bank, at its discretion, may authorize and pay overdrafts for checks, automatic bill payments (such as recurring debit card and ACH payments) and other transactions made using your checking account number.

Wells Fargo will not authorize your ATM and everyday (one-time) debit card transactions into overdraft unless you ask us to by adding Debit Card Overdraft Service2 to your account. If you add the optional Debit Card Overdraft Service to your checking account, the bank may approve (at our discretion) these transactions if you don’t have enough available money in your checking account or accounts linked for Overdraft Protection at the time of the transaction.

If you do overdraft, we will charge you a fee of $35 each time we pay an overdraft item to your account3, with a limit of three fees per day.

How to avoid overdrafting your account

There are precautions you can take to prevent overdrafts and avoid fees. The easiest approach? Keep a budget, track your spending, and don’t spend more than you have available.

But still, sometimes overdrafts happen, even when you closely monitor your money. For example, you could accidentally set up an automatic payment and schedule it before funds from a check you deposited are available in your account. Here are some tips to help avoid overdrafting.

1. Know your bill due dates.

If possible, try to time bill payments to be after paydays, or when you’ll expect to see money in your account. You may also be able to adjust your bill due dates: Many lenders will let you change what day of the month your payment is due. For example, if you know you get paid consistently on the 15th of the month but your car payment is due on the 14th, give your lender a call and ask for the due date to be pushed to the 16th of each month.

2. Know when you’re getting paid.

If you get paid every Friday, it’s pretty easy to track. But if you have an inconsistent paycheck, or your paycheck will be delayed due to a holiday, you may go a couple of weeks without pay (and your balance may get a little low).

3. Set up Direct Deposit.

Have your payroll or benefit checks automatically deposited into your account — it is safe, easy, and you will have immediate access to your money.

4. Get in the habit of checking your bank account regularly.

With our online banking and Wells Fargo Mobile® app, it’s easier than ever to keep tabs on what is in your account.

5. If you can, leave a small cash cushion in your account.

This way, even if you set up automatic bill payments before your next paycheck, you may be able to avoid an overdraft.

6. Set up alerts.

In addition to regularly checking your account, sign up to receive low balance alerts when your account dips below a certain amount you specify, like that cash cushion, or a direct deposit alert telling you when a check has been deposited to your account.4

7. Have a protection plan.

Consider enrolling in Overdraft Protection, which allows you to link your eligible Wells Fargo savings account to your checking account.5 Then the bank will use available funds from the linked account to authorize and pay your transactions if you don’t have enough money in your checking account.

8. Take advantage of your Extra Day.

Wells Fargo personal accounts come with our Extra Day Grace Period6. If you overdraw your account, Extra Day Grace Period gives you an extra business day to make deposits and avoid overdraft fees. If your available balance covers the prior business day’s overdraft items as of midnight Eastern Time, we’ll waive the associated overdraft fees3.

How overdraft services work for a debit card purchase

What would happen if you made a $150 purchase with your debit card when you only had $100 available to use in your Wells Fargo checking account?

The table below shows the outcome of the transaction depending on whether you have linked your savings account for Overdraft Protection or added Debit Card Overdraft Service to your account.

When there is not enough money in my checking account to cover transactions… …I prefer to have the transactions declined. …I prefer to use the money in other accounts to allow the transactions. …I prefer that the bank may approve the transactions and overdraw my account.
  No overdraft services Linked savings account for Overdraft Protection Enrolled in Debit Card Overdraft Service
Transaction is: Declined at the time of purchase Approved Approved or Declined at the bank’s discretion
    If a covering transfer or deposit7 is made by the posted cut-off time on the same business day no transfers are made and no fees are assessed
Funds transfers None $50 is transferred from the linked savings account (to cover the transaction) None
Fees None None $35 Overdraft fee charged to the checking account (unless cured during your Extra Day Grace Period)

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