Overdraft

An overdraft occurs when you spend more money than you have in your bank account. This can happen when you write a check for more than your balance, or when you use your debit card to make a purchase that exceeds your available funds.

There are two types of overdrafts:

* **Overdraft protection:** This is a service that your bank may offer to cover overdrafts. If you have overdraft protection, your bank will automatically transfer funds from another account you have with them, such as a savings account, to cover the overdraft.
* **Non-sufficient funds (NSF) fees:** If you don't have overdraft protection, your bank will charge you an NSF fee if you write a check or use your debit card for a purchase that exceeds your available funds.

Overdrafts can be expensive, so it's important to avoid them if possible. Here are a few tips:

* **Keep track of your spending:** Make sure you know how much money is in your account at all times. This will help you avoid writing checks or making purchases that you can't afford.
* **Set up alerts:** Your bank may offer the ability to set up alerts that will notify you when your balance is getting low. This can help you avoid overdrafts by giving you time to transfer funds into your account before you go overdrawn.
* **Consider overdraft protection:** If you're worried about overdrafts, overdraft protection may be a good option for you. Just be aware that there may be fees associated with this service.

Overdrafts can be a hassle, but they can also be avoided. By following these tips, you can keep your checking account in the black and avoid costly overdraft fees.

In addition to the fees mentioned above, overdrafts can also have a negative impact on your credit score. If you have a lot of overdrafts, it may be difficult to get approved for loans or credit cards in the future.

If you're struggling to avoid overdrafts, there are a few things you can do. First, try to increase your income or reduce your expenses. This will give you more money to cover your expenses and avoid overdrafts. You can also try to get a credit card with a low interest rate. This will allow you to pay off your overdrafts more quickly and avoid paying high interest charges.

If you're still struggling to avoid overdrafts, you may want to consider talking to your bank. They may be able to offer you some help, such as overdraft protection or a lower interest rate on your credit card.